EUR: Can it survive a Draghi hit? - ING

Given the Jackson Hole line-up, with President Draghi not due to speak until late Friday after European trading hours, it seems that some market participants may be slightly wary of being caught short euros in case the ECB chief does spring a surprise policy announcement, according to Viraj Patel, Research Analyst at ING.

Key Quotes

“EUR/$ may move higher into the event, although we now see greater risks of a ‘buy the rumour, sell the fact’ reaction. It is difficult to see President Draghi exceeding the intrinsic QE taper expectations priced into the euro, while he could choose to repeat the Governing Council’s concerns over currency markets front-running ECB policy normalisation. EUR/$ in this scenario moves lower post-Jackson Hole, or fails to push much higher under a weak $.”