Market Extra: BOJ and ECB expectations have trader hopes riding high for the yen and the euro

Much of the thesis surrounding a strong euro and a strengthening Japanese yen in 2018 is built around central banks and expectations for monetary-policy normalization across the globe. This week will put this idea to the test, as both the European Central Bank and the Bank of Japan hold their first meetings of the year.

Analysts expect the ECB to pull back on its easy-money policies this year to play catch-up with the Federal Reserve, which has already increased interest rates five times since 2015. A hawkish ECB might provide a further fillip to the euro EURUSD, +0.2455% in 2018.

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