The EURO has fallen 0.60% over the past week yet on a monthly view it is trading 1.14% higher against DOLLAR.

ECB is in no rush to raise rates for the time being maintaining its expansionary stance as inflation remains stuck around 1.0%.

ECB is inching towards normalisation despite it maintains a substantial degree of accommodation as it shrunk down its asset purchases to 60 billion per month and agreed to halve commencing 2018.

Q2 GDP Growth expanded 0.8% quarter on quarter, albeit, RBNZ’s outlook on GDP Growth seems to have changed while inflation raised to 1.9% (est. 1.6%) YoY.

Monetary policy divergence between Europe and the US widened and is likely to inch higher following Fed’s hike in December due to FOMC’s decision to withdraw some monetary accommodation twice, and probably x3, in 2017.

With hopes that economic activity will remain improved and headline inflation tilts higher ECB seems on the right path to unplugging monetary stimulus sooner than anticipated and seeing a hike of 2 basis points within 2018.

The current policy meeting is likely to unveil Europe’s economic outlook through to 2020 and provide signals on the future monetary policy divergence.

With the bank expecting growth to “maintain its current pace going forward” instead of expecting growth “to improve” it would be an overstatement to suggest that a rate hike is likely to be seen anytime soon.