ECB Press Conference Invites Minimal Volatility, Limited EUR/USD Range
- ECB keeps main rates on hold, as expected.
- President Draghi displays optimism over economy, but promises continuation of QE.
- EURUSD trades between $1.0582 and $1.0618 during first half of press conference.
The European Central Bank’s rate decision and press conference were notably quieter than meetings past, but that was to be expected with no change forecast in the main interest rate and interest rate corridor, and no change in the recently unveiled QE program. While the most exciting moment of the press conference came when a protestor interrupted President Draghi’s opening statement, FX markets were little impressed with the update on the state of affairs in the Euro-Zone.
The comments that President Draghi issued were fairly predictable and rather bland: recent economic data has been improving, but it’s too early to declare the crisis over; the ECB will continue its QE program until there is a sustainable pickup in inflation back towards the +2% annual target; the ECB intends to fully complete its QE program through September 2016; and there is no concern over the scarcity of bonds available, so there won’t be a change in the main interest rates for the foreseeable future.
EURUSD 1-minute Chart: April 15, 2015 Intraday
Around the rate decision and press conference, EURUSD held around its opening level of $1.0595, reaching a high of $1.0618 and a low of $1.0582 during the period. While prices oscillated fairly quickly between these two levels, there was a notable lack of directional trade around the ECB commentary. The two prior ECB meetings produced EURUSD daily ranges of 334-pips and 127-pips, whereas today’s range was only 93-pips at the time this report was written.
--- Written by Christopher Vecchio, Currency Strategist
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