The European Central Bank (ECB) policy meeting today will be the main focus of the market which expects interest rates to remain at current levels and the bond -buying program unchanged.
Among the key agendas to be touched upon by the central bank today is on its new inflation target and how it will affect monetary policy in the future.
Earlier this month, the ECB had announced a change in its inflation target to 2%, and allowed it to rise higher than the target.
This aims to reassure investors that policy will not be tightened ahead of time and increase their expectations for future inflationary growth, which has fallen below ECB targets for nearly a decade.
However, the central bank is expected to remain dovish in its current policy approach due to the remaining uncertainties, although some European zone economic data has shown improvement.
The coronavirus outbreak continues to be a European threat and has prompted some countries to further tighten travel restrictions and the effects of other disasters, such as the massive floods in Germany.
Following that, analysts did not expect any indication of a reduction in the emergency bond purchase program (PEPP) by the central bank.
At the beginning of the European session, the euro traded steady around 1.17900 against the US dollar.
