LONDON (Reuters) – The euro held near three-week lows on Thursday, before a European Central Bank meeting that many hope will signal fresh stimulus and inject some life into currencies stuck in trading ranges.

The euro/dollar exchange rate has had a quiet start to 2019 as central banks have put off tightening monetary policy as economic momentum slows. That has left investors struggling to decide on direction.

Analysts said expectations the ECB will signal new cheap bank loans had largely been priced in, so the focus would be on the bank’s economic forecasts and indications of whether it will further delay a rate increase the market expects in mid-2020.

The ECB is expected to cut growth forecasts and provide its strongest signal yet that more cheap long-term bank loans are coming.

“We don’t expect the ECB to make any changes but signal that changes are imminent,” said Thu Lan Nguyen, a currencies analyst at Commerzbank. “The risks are that the euro gives up a bit more. The risks are to the downside.”

The euro was little changed at $1.1313, but euro overnight implied volatility climbed overnight to its highest since Dec. 20.

The dollar, measured against a basket of currencies, stood at 96.875.

“Waiting for the overvalued dollar to reverse course requires patience, and is itself one driver of the lack of FX volatility,” Societe Generale strategist Kit Juckes said.

The dollar should slip over the coming year because U.S. economic growth is slowing and any boost from a resolution in the U.S.-China trade conflict is already priced in, according to a Reuters poll of strategists.

EASING STANCE

The Canadian and Australian dollars remained near two-month lows after investors bet their central banks would ease monetary policy as their economies slow.

The Aussie fell to a two-month low of $0.70205 after weaker-than-expected retail sales data, then recovered by 0.2 percent to $0.7049.

The Canadian dollar slid to its lowest since Jan. 4 after the Bank of Canada on Wednesday said there was “increased uncertainty” about future rate increases. It recovered to C$ 1.3426 on Thursday.

Sterling stabilized near $1.3150 as investors look toward next week’s British parliamentary votes on a proposed Brexit withdrawal.

The Japanese yen and Swiss franc gained marginally as financial investors turned cautious about the outlook for growth.

(Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh)

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