The euro has fallen in all five trading days when a ECB meeting is held in 2018
The ECB is due to meet tomorrow and is very much expected to reiterate the same language seen from its latest meeting back in July. The market is currently pricing in a likely rate hike to come around September next year (roughly 75% now), so as we're about 12 months away still, there's no reason for the ECB to start getting hasty.
The core language of the inflation outlook and timing of normalisation should not change. And Draghi is almost certain to reiterate the same message of "through the summer of 2019" when it comes to normalising monetary policy.
However, if there's one thing Draghi is consistent and good at so far this year, it's been that he has always found a way to kick the euro lower in each and every ECB meeting:
With the central bank slated to lower economic growth projections slightly, Draghi's tinkering on the language there could err towards a more dovish hint and provide yet another catalyst for the euro to fall.
However, the central bank's key focus remains that of inflation and with no changes to projection, this could also present an opportunity for Draghi to buck the trend and offer something for euro bulls to take home - by reiterating that inflation is still on the right path.
In essence, the meeting isn't likely to offer much of anything new as we already have a good idea on the winding down of asset purchases - which is set to be discontinued after the year-end. That only leaves two key aspects which is the central bank's balance sheet and rate guidance.
The latter will be the major focus moving forward and if Draghi plays his cards right, there shouldn't be any reason why the euro will jump all over the place should he reiterate the same message as he did in July with regards to rate guidance.
But if 2018 history is any indicator, Draghi's dovishness will somehow find a way to make it through the press conference and the euro has so far been a victim of that on each of the past five meetings. Although, I reckon the meeting will be a much calmer one with more semblance of a non-event with the only thing euro traders can chew on being the change in economic projections. However, Draghi has been known to surprise at times. So, any odds on Draghi making it six for six against the euro?