The EUR is slightly down against the USD, showing signs of consolidation as it approaches the ECB's policy decision. Recent economic data, including services PMI and CPI, have aligned with expectations, providing little impetus for ECB policymakers. The market anticipates a hold on policy changes, reflecting a neutral communication stance from the ECB, note Scotiabank's Shaun Osborne and Eric Theoret.

EUR consolidates ahead of ECB meeting

"This week’s price action is suggestive of consolidation, with congestion around 1.18 ahead of Thursday’s ECB policy decision."

"The euro area’s final services PMI’s softened slightly (in low expansion), and the latest (preliminary) CPI data were in line with expectations, printing 1.7% y/y on headline and 2.2% y/y on core and offering little for ECB policymakers ahead of the Feb 5 meeting."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)