Today's most important event in Eurozone - ECB's interest rate decision - takes place at 13:45 GMT 2. As most market participants think, ECB is unlikely to change policy and will temporize instead. Asset purchase volumes are expected to remain unchanged at 1.8 trillion euro (2 trillion USD), the basic interest - to be kept at 0%, and the deposit rate at -0.4%.
At the press conference following the meeting (14:30 GMT 2), ECB President Mario Draghi, apparently, will not make harsh statements and will emphasize that extra measures will be taken, if necessary. At the same time, Draghi is expected to stand up for loose policy and call for patience to wait for tangible results.
US better-than-expected statistics raised investors' demand for risk assets yesterday. ISM's Purchasing Managers Index (PMI) grew till 51.3, which is higher than April's value and a forecast of 50.4. Values over 50 point at growth and consolidate the dollar. ISM's index has been growing for the third consecutive month.
Yesterday's Beige Book (report published by the United States Federal Reserve Board) stated that labour markets had strengthened in most regions. Employment rate and salary growth were reported as moderate.
These statistics back up the idea that the FED might raise interest rates in June or July. Fed head Janet Yellen announced earlier that interest rate rise would be appropriate in the nearest months based on incoming economic data.
In the meanwhile, incoming data consolidate the US dollar. However, caution will be required when making trading decisions today as Mr Draghi knows how to reverse markets. His statement may suddenly push EUR/USD upwards as well as downwards.
On the whole, for want of sharp statements, EUR/USD is likely to continue dropping, while the dollar would steady ahead of Fed meeting on 15th June.