Forex Flash: Draghi and his sweaty palms - Investec

FXstreet.com (Barcelona) - Investec Treasury Analysts believe that Mario Draghi, the head of the European Central Bank (ECB), is likely to have sweaty palms going into one of the most eagerly anticipated ECB rate decisions in months this Thursday.

Amid rumours (probably started on this desk), they believe that Mr Draghi is an avid David Bowie fan it is quite likely he currently has “Ch-ch-ch-ch-changes, turn and face the strain” blasting out of his stereo in preparation for the possible 25 basis point cut in Europe’s interest rate, which will bring their rates in line with the UK at 0.50% and will be the first rate interest change in 9 months in the Zone.

They continue to add that the consequences of this could be euro weakness as a result of investors looking elsewhere for yield or the euro could receive a boost because investors interpret the cut as decisive policy action by Europe. They write, “The fact that the euro continues to be relatively well supported is a “Little Wonder” in itself so we will be paying close attention to Thursday decision, which is undoubtedly the main event of the week.”