EUR/USD continues to trade higher in anticipation of the European Central Bank (ECB) meeting. A 75 bps hike is well expected. Any disappointment may weigh on the euro, economists at OCBC Bank report.

Focus is on ECB rhetoric

“Focus is on ECB rhetoric – if the ECB plans to slow policy normalisation as growth outlook dims. Markets are also keeping a look out on whether officials have started to debate/ discuss QT and changing rules on TLTRO to reduce excessive volatility.”

“The risk is if ECB sounds slightly less hawkish, then even with a 75 bps hike, the EUR could still trade lower.”

See – ECB Preview: Forecasts from 15 major banks, no obstacles to a 75 bps hike