EUR/USD ; H4

eurusdmorning

 

Current rate – 1.08591

 

As we suspected in the run-up to the meeting, the increase in easing may be the result of a soft inflation environment, and thus, provoked a reduction in short-term inflation forecasts (per the staff projections), but the fundamental feedback loop of easier policy amid improving economic data otherwise raises the prospect of improved GDP figures a few years down the line.

In the short-term, with the Federal Reserve’s December 16 meeting coming up fast, it’s possible and even likely that traders reduce extreme positioning further in EUR-crosses and USD-pairs alike. There’s some historical precedence for the early-stages of a Fed rate hike cycle to lead into a disappointing initial weeks for the US Dollar, and with the ECB now less dovish than the market was expecting, EUR/USD could see prices push even further higher.

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