EUR traded mixed against other major currencies in the European session on Monday as investors prepared for the European Central Bank's policy decision later this week.
The single European currency rose versus JPY, SEK and CHF, fell versus CAD and USD, and changed little versus GBP and AUD.
The ECB will announce its policy decision on Thursday. Markets widely expect the central bank to deliver a 25-basis-point rate decrease. This would be the second cut in interest rates by the ECB after the reduction of the similar size at the June 12 meeting, which would bring its refinancing, deposit, and marginal funding rates to 4.00%, 3.50%, and 4.25%, respectively.
Along with the rate decision, the ECB’s policymakers will also release their updated macro projections. Particular attention will be paid to the inflation forecasts, significant revisions of which could prompt a reassessment of the bets on the ECB’s further rate actions.
According to Reuters, markets currently see a 52% probability that the ECB’s potential cut on Thursday will be followed by a similar move in December.