Danske Research discusses EUR/USD outlook in the near-term.
"For EUR/USD, the ECB meeting was largely uneventful. ECB gave guidance of the next re-calibration to take place at the December meeting, which was widely as expected. President Lagarde provided only highlights on how ECB thinks about the upcoming QE buying calibration, but fell short of commenting on what a moderation of purchases actually means in terms of numbers. There was a minor rally in EUR/USD on the initial press release, which was paired not too long after given Largarde's dovishly-hawkish comments," Danske notes.
"From here, we suspect EUR/USD will be in the hands of 1) relative equities (US vs Europe and value vs. growth in styles) and 2) general risk sentiment and especially so as Fed enters its silent-period on Saturday, ahead of the FOMC meeting in two weeks. Risk sentiment aside, the release of US PPI and CPI may have some surprise potential in terms of moving the needle on Fed pricing and hence, EUR/USD," Danske adds.