Euro correction ahead of the ECB

jakarta, Strategydesk - Euro trying to maintain a thin reinforcement, achieved after a German court to support the country's involvement in the euro zone bailout. But strengthening the still fragile ahead of the regular meeting of the ECB. The market was relieved by the decision of the German Federal Constitutional Pengadlian mentioning bailout efforts for Greek legal. This is to wash off the political obstacles that had feared could disrupt the bailout plan. But the euro could hit when ECB President Jean-Claude Trichet delivered a dovish statement. Trichet is expected to deliver a statement of caution related to the purchase of bonds Spain and Italy. This move was criticized from both inside and outside the ECB. If true, then the bond yield and the cost of credit guarantees kedus country could rise again.

In addition, there is a chance the ECB will give a signal to stop the cycle pengetatannya in regular meetings on Thursday because of the debt crisis of inhibiting the growth of the eurozone, according to economists. Following two controversial increases in April and July, some analysts even predict a cut in interest rates in coming months, as slowing economies Germany and France. At the risk of potentially declining inflation, the possibility of higher interest rates reduced further and open up the trimming opportunities ECB expected to maintain its rate at 1.50%. The market will look at the possibility of the ECB announced a downward revision to forecast inflation and growth, in a press conference after its regular meeting Thursday. This is what opened the door to rate cuts. In addition to the ECB, the market will also look at the results of the regular BOE meeting, which may affect the sterling. BOE expected to maintain its rate at 0.50%. The possibility of easing could weaken sterling. Amid slowing economy, BoE urged to make even launch another easing of monetary stimulus. Meanwhile in the U.S., the Fed Chairman Ben Bernanke will speak tonight. The market wants to see whether Bernanke will give a signal about a new stimulus in the speech. Economic Report of the Fed or the Beige Book, which was published last night, showed gloomy U.S. economic conditions. This report increased speculation the Fed will launch its Quantitative Easing (QE) Volume three. The dollar could weaken if Bernanke reinforces expectations. But it also depends on the perception of the market on Trichet's statement.

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