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.

0

Notifications

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

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Bullish
Wall Street
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bullish
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • NASDAQ EXTENDS FALL, LAST DOWN ABOUT 2.1% Damn this Apple Watch is good... where Jay Powell at? https://t.co/8yXsJKehxy
  • France daily Covid cases rises above 13,000, highest since lockdown - BBG
  • GBP falling to fresh sessions lows following UK PM Johnson's warning that the UK is on the verge of having a second wave of Covid-19
  • Dow Jones pivots higher with the S&P 500 and Nasdaq owing to consumer sentiment data. Get your #indices market update from @RichDvorakFX here: https://t.co/MN3YH5WNMV https://t.co/ELJkNhn6LK
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.14%, while traders in NZD/USD are at opposite extremes with 70.68%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/wQSpYPp9wY
  • US equities drop to session lows as Speaker Pelosi states that she is sticking with demands for a $2.2 trillion stimulus bill
  • US #Dollar Outlook: $USD Grinds into Weekly Support – $DXY Levels - https://t.co/Teg9aN8GHQ https://t.co/bdifryFcSD
  • Commodities Update: As of 16:00, these are your best and worst performers based on the London trading schedule: Gold: 0.77% Silver: 0.39% Oil - US Crude: -0.08% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/4rXyUYBYzw
  • Forex Update: As of 16:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.36% 🇯🇵JPY: 0.31% 🇪🇺EUR: 0.05% 🇨🇦CAD: -0.11% 🇨🇭CHF: -0.14% 🇬🇧GBP: -0.17% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/LZ5R3mMJhS
  • - 77% of adults say they are okay financially in June vs 72% in early April - Rate of layoffs is much higher among low-income families - 31% of workers do all work from home vs 41% in early April
UPDATED: EUR/USD Surges as ECB Cuts Deposit Rate, Few Changes to QE

UPDATED: EUR/USD Surges as ECB Cuts Deposit Rate, Few Changes to QE

Share:

Talking Points

- ECB cuts deposit rate by -10-bps, meeting marketing expectations.

- QE program enhancement limited to extension to March 2017.

- EUR/USD surges over +300-pips around the ECB.

UPDATED (13:45 GMT): This article has been updated to reflect ECB President Mario Draghi's press conference and the release of the staff projections. This article has been amended from its original form to incorporate this information.

Ahead of the meeting, market expectations were elevated for at least a 10-bps rate cut, an extension of the QE program, and an increase in the QE program's run rate. Chalk this one up as a major disappointment: the ECB failed to deliver on high expectations for more easing, setting up EUR/USD for one of its largest single day moves of the year (second largest next to March 18, 2015, when it gained +2.55%; at the time of writing, EUR/USD had gain +1.91% today).

As noted below in the original market alert, the ECB did indeed deliver on the expectation for a 10-bps rate cut; however, seeing as how markets had immediately priced this in going back to October 22, the lack of a deeper cut has proved disappointing.

Likewise, with only one QE enhancement undertaken - the life of the program was extended to March 2017, while the run rate was held at €60 billion per month - EUR/USD has been sent off to the races. Contributing to the dovish disappointment was a lack of significant downgrades to the ECB's staff projections.

Going into the meeting, we felt that signficant downgrades here were unlikely, and our belief of a lower inflation/higher GDP mix to the forecasts proved true. Concurrently, this is chalked up to another disappointment - softer forecasters would have laid the groundwork for future action. Yet, the feedback loop makes sense: with EUR/USD trading below the ECB's NEER (first chart), the Euro itself is not a headwind to growth; so the enhanced dovish policy at the margin (only a deposit rate cut) increases the likelihood that future economic data - like GDP in 2017 and beyond - are better than previously anticipated. -CV

Here's the impact on EUR/USD so far this morning:

EUR/USD 1-minute Chart: December 3, 2015 Intraday

UPDATED: EUR/USD Surges as ECB Cuts Deposit Rate, Few Changes to QE

This is the original article.

The European Central Bank has just announced a 10 basis point rate cut to the bank’s deposit rate. This will bring the ECB Deposit rate down to -.3% from -.2%, and will go into effect on December 9th.

This morning’s release was not without drama. Approximately eight minutes ahead of the release, the Euro spiked higher against most major currencies, as a report came out from a major media outlet that the ECB was going to leave the deposit rate unchanged. This created a spike that saw prices in EUR/USD run higher by as much as 140 pips going into the release.

UPDATED: EUR/USD Surges as ECB Cuts Deposit Rate, Few Changes to QE

But when the data hit at 7:45 AM EST, we did get that deposit rate cut from the ECB, albeit only 10 basis points versus the expectation of a 15 basis point cut that many were looking for. So, the leaked report turned out to be false, but the Euro is still trading higher on the back of a weaker rate cut than what many were expecting.

The Euro is continuing to run higher, and the ECB press conference begins at 8:30 AM EST. This should be a fun one.

Created with Marketscope/Trading Station II; prepared by James Stanley

--- Written by James Stanley, Analyst for DailyFX.com

To receive James Stanley’s analysis directly via email, please SIGN UP HERE

Contact and follow James on Twitter: @JStanleyFX

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

DISCLOSURES