ECB may signal that stimulus wind down is coming at Thursday meeting

Investing.com - European Central Bank President Mario Draghi could signal as soon as Thursday’s policy meeting that the bank will start winding down its €2.3-trillion ($2.7-trillion) stimulus program.The ECB’s latest set of staff economic forecasts, published on Thursday, could offer it an occasion to signal a change of direction.Investors are on edge, waiting to sell euro zone government bonds and buy up the euro as soon as the central bank indicates that the days of unconventional monetary policy are numbered. ECB officials have given no fresh policy cues since late June, when Draghi roiled markets by hinting at the ECB Forum in Sintra, Portugal how a gradual unwinding of stimulus could work.But the central bank is unlikely to announce the specific details that markets are looking for due to the complexity of the upcoming taper policy pivot.The strong euro is a headache for the ECB because it pushes up the price of the euro area’s exports and reduces import prices, acting as a drag on growth and inflation.Inflation in the euro area remains sluggish and some analysts think the ECB shouldn’t move until inflation is closer to its target of just below 2%.The ECB will announce its latest monetary policy decision at 1:45 p.m. Frankfurt time.