Flash: Expected actions from ECB - RBS

FXStreet (Guatemala) - Strategists at RBS said they had expected the Council to cut the main refinancing rate at the March meeting in order to restore a sufficient buffer of inflation above zero, but...

Key Quotes:

"However, it now looks difficult to generate a consensus in favour of cutting rates given the positive news on inflation – the upwards revision to the January print and an upside surprise on core and headline inflation in the February flash".

"With the base effects set to turn supportive, and the Council's narrative of a modest recovery gradually eroding the disinflationary margin of spare capacity being corroborated by the activity data, we now expect rates to remain on hold at their current levels".