The ECB will be thrown directly into the EUR debate this afternoon. The EUR traded stronger against the USD on Wednesday, but remains in a weak trend versus the Greenback. ECB President Trichet will step into the spotlight today and will certainly face questions about the risk of a double dip recession, debt risk ratios, E.U balance sheets, and interbank liquidity issues which have arisen. As if that is not enough for one person’s plate, Trichet may find himself under additional pressure because of a lack of credibility that is now becoming evident. Investors certainly remember that Trichet claimed last month that the ECB had not discussed buying European Bonds and that this was promptly followed a few days later by the Central Bank admitting that they were going to get active in this respect. A lack of clarity and an uncoordinated plan has hurt the EUR the past month as the Sovereign Debt crisis has grown in stature. The EUR is certainly looking for stability and investors will be more than interested to see if Claude Trichet can deliver some.
Written by bforex.com