Bank of America Global Research discusses its expectations around next week's ECB December policy meeting.
"As the EUR has been appreciating again recently, a key question is whether the ECB will push against EUR strength in its Dec meeting. The EUR strength has been primarily a USD sell-off, but the ECB could still be concerned given weak data," BofA notes.
"We would expect the EUR to come up at the press conference. But, there is not much that the ECB can actually do to directly affect the EUR, in our view. We argue that the ECB would be more effective if it could address its recent communication problems and, in the context of the Strategy Policy Review next year, clarify how QE can continue after the pandemic emergency purchase programme (PEPP),"BofA adds.