The ECB minutes were released yesterday which showed that the Governing Council Officials were concerned with the lack of inflation in the Euro Area. The minutes revealed that any downward revision of inflation could be potentially worrisome and that the rebound in the underlying inflation was stalling. Striking a similar tone, ECB Chief Economist Praet remarked that the ECB's credibility would be at risk if the inflation target was missed. With ECB officials continuing dovish talk, markets are starting to build strong expectations that the ECB will act in the December monetary policy meeting. The current rebound in EURUSD is likely to remain short-lived as traders unwind their long positions resulting in a medium-term short squeeze. The single currency is likely to face further downside at a fundamental level in the next few weeks. EURUSD gained 0.69% for the session yesterday closing at 1.0733.
Dollar Falls on Profit-Taking
Daily Analysis - 20/11/2015