Analysts at Bank of America (BofA) expect the upcoming European Central Bank (ECB) meeting to have little impact on the Euro (EUR). According to them, the market has already priced in the ECB's latest rate cut, and stressed that other factors are more influential in the movement of the foreign exchange market this year.
The ECB continues to take a cautious policy approach, relying heavily on data and remaining open to various possibilities at each meeting. Analysts also stressed that the ECB's decision is heavily influenced by US policy and reforms in the European Union, as the bank navigates significant uncertainty and balances various potential risks.
Market expectations currently point to a terminal rate below 2%, suggesting that any further cuts below the neutral rate are unlikely to have a significant impact. Analysts believe that the focus on the ECB's projections and discussion of the risks involved could provide clues to the bank's latest policy considerations and response strategy.
In conclusion, BofA analysts expect this ECB meeting to not be a major catalyst for EUR movements, as the market has factored in recent policy actions and other external factors are now playing a more important role in foreign exchange dynamics this year.
