The European Central Bank (ECB) is expected to maintain its dovish stance in the monetary policy meeting scheduled to be held on March 9 by 12:45GMT, although the country’s inflation has hit the central bank’s 2 percent inflation target.

The ECB’s reaction to the stronger inflation figures is expected to remain muted since it is driven by the volatile energy and unprocessed food price inflation, whereas the underlying price pressure remains weak, Danske Bank reported.

Further, the CB has said it will not change its monetary policy based on such a rise in inflation and in the introductory statement from the latest ECB meeting it was communicated that 'the Governing Council will continue to look through changes in HICP inflation if judged to be transient and to have no implication for the medium-term outlook for price stability'.

Looking further ahead, a first step from the ECB when initiating a less accommodative monetary policy stance could be to remove its forward guidance. Currently, the ECB communicates that policy rates are expected 'to remain at present or lower levels for an extended period of time, and well past the horizon of our net asset purchases' and at some point in time the ECB will start stating that policy rates should not go lower, but stay at present levels for an extended period of time.

"We expect core inflation will have to exceed 1.0 percent for a number of months before the ECB will announce tapering of its QE purchases," the report commented.

Likewise, the ECB could at some point in time remove its easing bias related to the QE purchases where it currently communicates that it stands ready to increase its QE in terms of size and/or duration.

Meanwhile, at 06:00GMT, the FxWirePro's Hourly Euro Strength Index remained highly bullish at 135.25 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex