Wednesday afternoon saw the first of two-key headline central bank events as the ECB announced their rate decision and President Mario Draghi sat for his press conference. The 12.45BST rate decision passed without incident with the ECB leaving rates on hold along with their stimulus approach. However, what the markets wanted to hear about was the TLTRO (mk3) plan that was announced at last month’s meeting.
At the press conference Mario Draghi continued his cautious approach to the Eurozone economy, causing the Euro to fall against the US dollar. Mario Draghi went as far as to state that the tiering and terms of the new TLTRO had not even been discussed at the meeting, along with forward guidance. Draghi did however state that the ECB was on high alert and ready to act should a further deterioration occur in the data.
EURUSD, which has been stuck in a mere 300 point range since the turn of the year saw a sell off as Draghi’s track record of sending the Euro lower with his pressers continued. The fall saw a drop to the hourly upside trendline support at 1.2295 before rebounding and leaving the level intact for now.
The information is not to be construed as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product, or instrument; or to participate in any trading strategy. Readers should seek their own advice. Reproduction or redistribution of this information is not permitted.
Ongoing rate curve repricing and risk asset reaction perfectly illustrate how worryingly reliant investors have become on easy money policies