Markets Await the ECB Policy Meeting

The U.S. dollar settled yesterday after the US Treasury note sat lower. Such negative data led investors to cut their bets on the Federal Reserve hiking interest rates in December. The U.S. dollar index settled at 98, the highest level in 7-month’s.

On Wednesday, Gold rose on a weaker dollar, amid concerns over the U.S. interest rates. The yellow metal settled above the 200-day moving average at $1,265 and could re-test such level.

Markets are awaiting ECB policy meeting and investors are focused on whether the ECB President Mario Draghi will give any indication of when the ECB may begin decreasing its bond purchasing programme.

Euro could face sharp fluctuations during the course of the day and could decline further to $1.07 if the ECB extended its QE programme.

Technically, the single currency could touch new highs, if the ECB keeps its policy unchanged.

The greenback fell to ¥103 vs. JPY and could settle at ¥103.50 by the end of the week.

Oil prices rose as much as 1% yesterday, on optimism over OPEC supply restraint and after a surprise U.S. inventory drawdown. U.S. crude traded at $51.50 and could settled at $51.

The most important economic events:

• EUR European Central Bank Rate Decision (OCT 20): (GMT 13:45) Important – Forecast (0.00%) – Previous (0.00%).
• EUR ECB Deposit Facility Rate (OCT 20): (GMT 13:45) Important – Forecast (-0.40%) – Previous (-0.40%).
• EUR ECB Marginal Lending Facility (OCT 20): (GMT 13:45) Important – Forecast (0.25%) – Previous (0.25%).
• EUR ECB Asset Purchase Target (OCT): (GMT 13:45) Important – Forecast (EU80b) – Previous (EU80b).
• USD Leading Indicators (SEP): (GMT 16:00) Medium – Forecast (0.2%) – Previous (-0.2%).

Disclaimer
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.