The euro/Swiss franc (EUR/CHF) currency pair has been a forgotten currency pair, but is the worst days behind it now? The franc has been stubbornly strong against the euro. But with the ECB’s next policy move likely to be to reduce accommodation, the rate differential favours a recovery in EUR/CHF.
Given the extent of the current rally, there is a possibility that the DAX may turn lower again from these levels, for it does look a little overbought. The technical short-term bias would turn bearish upon the breakdown of a key support level such as 11780. In this potential scenario, the DAX may then drop to the old resistance levels such as 11430 or even all the way to 10800 before potentially bouncing back.
The European Central Bank is stealing the spotlight temporarily from the Federal Reserve today as it announces its latest monetary policy decision and hopefully offers some guidance for the rest of the year.
As expected, the European Central Bank has decided to leave its monetary policy unchanged: the main refinancing rate has been kept at zero, deposit facility rate at -0.40% and marginal lending rate at 0.25%. The attention will be on the ECB President Mario Draghi, who will be speaking at the press conference at 13:30 GMT.
The European Central Bank will not tighten policy to counter surging inflation as the rise is temporary and due almost entirely to rising oil prices, ECB President Mario Draghi said on Monday, brushing aside calls for the ECB to reduce stimulus.
The Bank of Japan will release its Monetary policy statement and press conference between the end of Monday and the beginning of Tuesday Dec. 20. Analysts are expecting the central bank to keep the quantitative easing unchanged and negative rates on hold. The weak Japanese yen and hawkish U.S. growth expectations have given the BOJ room to hold and even improve its economy assessment.