EUR: will the ECB change its rhetoric on Thursday?

The UK election will be closely watched across Europe too, not least because the Brexit negotiations are set to begin again this month. In the meantime, there will be a lot of focus on the European Central Bank (ECB) meeting that is coincidentally held on the same day as the UK elections. The Eurozone will surely give a flow of positive data, although inflation did taper last week somewhat.

There has been speculation that the ECB could change the rhetoric that is set to follow the interest rate decision on Thursday in a move to signpost to the market their intent to slow the asset purchasing via quantitative easing. If the ECB messaging leans towards tightening monetary policy then we could see the euro strengthen on the back of that. On the other hand, if the ECB is slightly dovish the euro could lose momentum.

This makes Thursday potentially an extremely volatile day for the single currency as it is exposed to both the UK election and ECB risk.