EUROPE Forex Update

European finance ministers will be meeting today in Helsinki while ECB officials are also attending the meeting with ECB president Jean-Claude Trichet expected to brief the ministers.

French Finance Minister Breon and German Finance Minister Steinbrueck have both cautioned against overly tight monetary policy.

Meanwhile, long-term inflation expectations have eased, and should this trend continue, the ECB may indeed moderate its hawkish stance.

For now, however, the ECB continues its hawkish rhetoric, with Mersch indicating that he has "no quarrel" with expectations of short term rate rises and the ECB's "immediate next steps".

The Euribor strip is discounting two more 25bp rate hikes of the next three ECB policy meetings this year which has given support to single currency.

This Meeting shall be causing nice movement in EUR/USD pair