Euro trades softer as ECB looms


What has the ECB to say?

Tomorrow’s ECB meeting could determine the outlook for European rates as markets await the central bank’s views on the recent spate of weaker data. ECB’s Coeure has said previously that the weakness in the data is “surprising”, so tomorrow’s meeting could determine whether the ECB views it as temporary, or part of a more serious longer-term trend.

EUR/USD has traded on the weaker side in Asia today, partly driven by a stronger US dollar on the back of a lack of news on incremental progress in the US-China trade talks. The FX pair has so far failed to take out yesterday’s low of 1.1289. The regional currency is facing its fourth down-day in a row, edging towards the middle of a downtrend channel that has been unfolding since the January high, and no doubt the expectations for tomorrow’s meeting are exercising their influence.


EUR/USD Daily Chart

Source: OANDA fxTrade


Is another central bank turning dovish?

Today’s GDP print miss for the fourth quarter in Australia has forced local interest rate markets to start pricing in a higher chances of an earlier RBA rate cut, as data disappoints and the number of research notes calling for cuts this year increases. Growth in Q4 hit the lowest since Q2 2017 on an annualized basis, at 2.3% y/y, slower than Q3 and below analysts’ forecasts of a 2.5% gain.

The probability of a cut in the RBA’s cash rate in June has moved above 50% after today’s data. It was at 46% yesterday and only 23% at the start of the month, according to Bloomberg calculations. Since the start of the month AUD/USD has fallen 0.8%.


Slow data day

It’s a slow data day for the middle of the week before we head into a busier second half. We have speeches from Bank of England’s Cunliffe and Saunders to consider followed by the Fed’s Williams. On the data front, there’s nothing to excite Europe, while in the US session we get to see the ADP employment change for February (jobs growth seen slowing to 189k from 213k) and the US trade balance for December. The deficit is expected to widen to $57.0 billion, which would be the largest since January 2018, from $49.3 billion in November.


The full MarketPulse data calendar can be viewed at



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Andrew Robinson

Andrew Robinson

Senior Market Analyst at MarketPulse
A seasoned professional with more than 30 years’ experience in foreign exchange, interest rates and commodities, Andrew Robinson is a senior market analyst with OANDA, responsible for providing timely and relevant market commentary and live market analysis throughout the Asia-Pacific region. Having previously worked in Europe, since moving to Singapore he worked with several leading institutions including Bloomberg, Saxo Capital Markets and Informa Global Markets, proving FX strategies based on a combination of technical and fundamental analysis as well as market flow information. Andrew began his career as an FX dealer with NatWest and the Royal Bank of Scotland in the UK.
Andrew Robinson

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