text: On the market side, there's little evidence to suggest that the EUR is trading at an elevated level due to 'exogenous' (non-fundamental) factors; EUR/USD's sensitivity to changes in global risk sentiment remains neutral - indicating the single currency is not trading with any particular 'safe-haven' bias despite the recent uptick in global risk aversion. In fact, the currency is probably a secondary concern for the Governing Council this month given the elevated stock market volatility - which at this stage poses a greater risk to (more tighter) Eurozone financial conditions.
  A hawkish surprise would be if President Draghi begins to lay the foundations for a 2018 end to QE. This could come in the form of the Governing Council entertaining the prospect of an abrupt end to asset purchases in September - when the current tapered QE schedule is due to end. Judging by recent media reports, however, policymakers are unlikely to signal any significant QE policy announcements until the July ECB meeting, at the earliest.
  The bottom line is that it will be difficult to see a dovish Draghi-led decline in the EUR given the relatively low expectations going into the April ECB meeting. The ECB chief would have to be on fine 'dovish' form to knock further steam out of the EUR's medium-term bullish trajectory. For now, we retain our EUR/USD target of 1.27-1.28 this summer on the back of a hawkish ECB policy re-assessment - which should set the pair on a path towards 1.30 by year-end.