Economists’ expectations on ECB monetary policy

While the financial market and the euro traders anxiously wait for the monetary policy decision by the European Central Bank later this month, economists surveyed by the Bloomberg remains confident that a rate hike is not coming until very late next year or 2019.

• Economists expect the European Central Bank to take a decision extend its asset purchase program into 2018 but a much-reduced pace when the governing council meets on October 26th.
   
• The general consensus is that sometime in the first quarter, ECB would signal phased winding of its asset purchase program by the end of the year.
   
• It is expected that at some point in the third or fourth quarter the ECB will send hike signal and carry out its first rate hike either in December 2018 or in 2019.

This basically means that the easing will still continue for quite some time and more importantly, the accommodative monetary policy and expended balance sheet are here to stay for still a long time.

Such accommodative stance would limit the euro's gains on the dollar. The single currency is currently trading at 1.182 against the dollar.