- The European economy is making progress and the policy of the ECB is likely to be revised as early as the first half of 2018.
- Wage growth is good, but inflation still remains a major problem for the future QE cutback and normalization of the interest rate.
- The key factor that will affect the decision of the central bank will be the level of inflation. If inflation continues to rise smoothly, the ECB will take measures to tighten monetary policy earlier than expected.
- Extending QE will be unjustified given the good data coming from the euro area.
Comments that the ECB may change its monetary policy in 2018. are something new to the euro and this has led to a strong growth of over 70 pips. The ECB tone will most likely continue to be the same throughout the year and this will lead to further increases.
Jr Trader Petar Milanov
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