The ECB will likely make no major changes to its policy framework when it meets this week in Frankfurt, but the governors could signal a lowering of the rate in the coming months.

The ECB surprised the markets when it reduced its core interest rate last November. That cut was prompted by lower-than-expected inflation.

Now the latest figures on Eurozone inflation have shown that price rises fell to 0.8 percent in December, down from 0.9 percent the month before, increasing concerns that the Eurozone may face a period of deflation.

Draghi is expected to maintain his cautious outlook and recommit to lower interest rates for an extended period of time. It’s highly unlikely that Draghi give a specific time frame or economic threshold for forward guidance, as if he does, we could see the euro come under downward pressure.

Global financial markets are likely to continue the fluctuations today, due to the variety of economic releases, with confidence reports for the Eurozone expected to show the overall sentiment status across euro markets brightened.

- Business climate indicator expected at 0.22 from 0.18

- Economic confidence expected to rise to 99.1 from 98.5

- Consumer Confidence set to be steady at -13.6

- Industrial confidence expected at -3.0 from -3.9

Generally, any improvements recorded in confidence levels could be a reflection of some of the recent positive data, while the prevailing pessimism remains over the Eurozone economic conditions, especially the sovereign debt crisis and the fear of its expansion could only bring more uncertainty.

Against the dollar, the euro reversed last session’s losses, trading at $1.35939 after opening at $1.35746. The pair previously rose to a session high of 1.35899 and a session low of 1.35663.