EUR/USD retraced earlier losses to trade above 1.1600 ahead of the ECB meeting, where the policy rate is widely expected to remain at 2.00%. Strong Q3 GDP growth and stable inflation reinforce the view that the bar for further easing is high, keeping the euro supported, BBH FX analysts report.

ECB expected to keep policy rate steady at 2.00%

"EUR/USD retraced half of yesterday’s Fed-induced undershoot to be trading back above 1.1600. The ECB is widely expected to keep the policy rate unchanged for a third consecutive meeting at 2.00% (1:15pm London, 9:15am New York). There are no new economic projections associated with this policy-setting meeting. The next set of forecasts is due in December."

"The swaps market continues to price-in about 50% odds that the ECB delivers a 25bps cut in the next 12 months and the policy rate to bottom at 1.75%. In our view, the bar for more ECB easing is high, which is EUR supportive. Eurozone inflation is stable around the ECB’s 2% target and Q3 GDP growth overshot expectations. Real GDP rose 0.2% q/q vs. 0.1% in Q2. Consensus penciled-in 0.1% q/q while the ECB projected the economy to stagnate in Q3."