Bank of America Merrill Lynch Research discusses its expectations around the ECB September policy meeting on Thursday.
"We expect the ECB to convey a message of confidence into the current outlook uncertainty during Thursday's press conference. The ECB will probably argue that the acquired speed in the economy is enough to kick-start core inflation recovery into next year, even if growth is slowing. The ECB has frozen monetary policy until summer 2019 with calendar-based forward guidance," BofAML argues.
"We do not expect the ECB meeting to have a sustained EUR impact. We have recently argued that Italy poses a short-term downside EUR risk, but we expect the EUR to appreciate toward the end of the year and next year. The equilibrium EURUSD level is between 1.20 and 1.25. The market is short EURUSD. The US midterm elections could split the US government, weakening the USD. The end of ECB QE and the first hike next year should support the Euro," BofAML adds.