News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View more
Real Time News
  • The Central Bank of the Republic of Turkey ended its monetary tightening cycle will a surprise 100-bps rate cut on Thursday. Get your market update from @CVecchioFX here:
  • Risk on sentiment has buoyed AUD/USD, with the cross trading back above 0.7300 $AUDUSD
  • The morning after the Fed has produced some robust moves in markets, with both stocks and bonds putting in a notable leap. Get your market update from @JStanleyFX here:
  • Gold trades back down to $1,750 as US real yields tick higher $XAUUSD #Gold
  • Canadian Dollar Price Forecast: USD/CAD Snaps Back to Key Support $USDCAD
  • RT @BrendanFaganFx: 77 counterparties take $1.352 trillion at Fed's fixed-rate reverse repo $USD $DXY
  • EUR/USD attempts to halt a five day decline as the Federal Reserve sticks to the sidelines. Get your market update from @DavidJSong here:
  • US Markit Composite PMI for September fell to 54.5 from 55.4, whereby the services and manufacturing figures fell to 54.4 and 60.5 respectively, both missing analyst estimates. Get your market update from @JMcQueenFX here:
  • S&P 500, Nasdaq Rally After the Fed; 10 Year Yield to Two-Month-Highs
  • #Bitcoin Outlook: $BTCUSD Bounce From 40K, Fake-out or Shake-out? -
Euro Choppy as ECB Holds Rate, Draghi Holds Cautiously Optimistic Tone

Euro Choppy as ECB Holds Rate, Draghi Holds Cautiously Optimistic Tone

Christopher Vecchio, CFA, Senior Strategist

THE TAKEAWAY: ECB holds key rate at 0.50%, no new measures > Governing Council “tentatively” optimistic on early stages of recovery, but “subdued” credit growth remains a concern > EURUSD NEUTRAL

The European Central Bank’s post-policy meeting press conference is ongoing, but with the statement having been read and President Mario Draghi’s Q&A session nearly halfway over, the bulk of information relevant to trading has been revealed.

Overall, the tone President Draghi has struck has been decidedly “neutral.” On the plus-side, recent data suggests that regional economies are “tentatively recovering from low levels,” and confirm the “baseline scenarios” that the ECB expects for the rest of 2013. Likewise, medium-term inflation expectations remain “firmly anchored,” despite their tendency to stay below the ECB’s target of +2%.

To balance out the positivity (hawkishness), President Draghi also mentioned two key topics that are holding back the Euro-Zone’s recovery: labor markets continue to struggle despite implementing “whatever it takes” policies to help the region’s financials; and credit growth remains subdued.

Moving away from the commentary, it is worth noting that there was a great deal of time spent on how weak credit growth has been recently – more so than at previous meetings. This is important in light of the fact that liquidity levels are falling back to pre-LTRO1 levels (December 2011).

Why is this important? If risk-aversion picks up and European yields rise, banks will suffer; and more liquidity provisions shouldn’t be ruled out, which would be Euro-negative (as LTRO1 and LTRO2 were). Credit growth (or lack of) should be a focus over the next few months, as the ECB retains its accommodative stance for “an extended period of time.”

Want more of my analysis and commentary? Join my distribution list.

EURUSD 1-minute Chart: August 1, 2013

Euro_Choppy_as_ECB_Holds_Rate_Draghi_Holds_Cautiously_Optimistic_Tone_body_x0000_i1027.png, Euro Choppy as ECB Holds Rate, Draghi Holds Cautiously Optimistic Tone

Charts Created using Marketscopeprepared by Christopher Vecchio

Following the release, the EURUSD traded in a volatile 53-pip range, from $1.3192 to 1.3245. Having opened the press conference at 1.3235, the EURUSD is only marginally lower. Elsewhere, the EURJPY is performing better at ¥130.78 from 130.49; and the EURGBP has recovered off of session lows at £0.8710 from 0.8679.

--- Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, please fill out this form

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.