ECB chief under pressure to boost euro confidence

NEW YORK (Forex News Now) – European Central Bank President Jean Claude Trichet will hold his regular press conference Thursday amid the backdrop of the continuing euro zone debt crisis.

European markets rebounded in the last 24 hours as investors hoped the ECB would act to counter fears that Europe’s growing debt crisis would spread to from Ireland, Portugal and Spain to Italy and even Belgium.

Trichet and ECB Vice President Vitor Constancio are scheduled to speak at 1:30 P.M., GMT; as such the data is likely to dominate European afternoon currency market trading.

The central bank’s chief told a European parliamentary committee on Tuesday that markets were “underestimating the determination” of European governments to face the mounting crisis.

According to EUR/USD analysis, a convincing explanation from Trichet on how the ECB’s monetary policy will be used to fight the crisis could lift EUR/USD towards key resistance around the high of Sep. 21, 1.3285.

But should his speech fail to instill confidence in investors, the currency pair could continue to fall toward a 10-week low of 1.2955.