Draghi May Catch a Fearful, Wary Market by Surprise: Analysis
Market positioning creates room for volatility.
Draghi’s Rhetoric and the Impact on Markets
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Market participants have refrained from taking large short positions in the euro against the dollar ahead of the European Central Bank meeting this week in fear of a repeat of December’s disappointment, potentially paving the way for a dovish surprise, Bloomberg strategists Vassilis Karamanis and Richard Jones write.
Short euro positioning against the greenback going into the meeting is expected to be lighter compared with December, two traders in London and one in southern Europe said. The traders, who asked not to be named as they are not authorized to speak publicly, said that the currency pair moved above $1.1050 on Tuesday as a result of investors closing part of their short positions.