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
Mixed
Oil - US Crude
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
Wall Street
Bearish
Gold
Bullish
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • Commodities Update: As of 02:00, these are your best and worst performers based on the London trading schedule: Silver: 0.22% Oil - US Crude: -0.12% Gold: -0.14% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/7UGWflcF7Y
  • - #NZDCHF outlook bearish as the pair struggles to surmount key resistance range - #NZDCAD trading at 13-month highs, but are technical cues hinting at a pullback? - #AUDNZD is again retreating from five-year resistance – how much will it decline? https://www.dailyfx.com/forex/market_alert/2020/07/08/New-Zealand-Dollar-Analysis-NZDCHF-NZDCAD-AUDNZD.html
  • Forex Update: As of 02:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 0.08% 🇪🇺EUR: 0.00% 🇨🇦CAD: 0.00% 🇨🇭CHF: -0.04% 🇦🇺AUD: -0.10% 🇯🇵JPY: -0.12% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/lTYr3UzRhP
  • RT @DanielGMoss: A ‘second wave’ of #COVID19 cases threatens to hamper #Australia's tentative recovery Uncertainty around the future of fi…
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.26%, while traders in NZD/USD are at opposite extremes with 72.66%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/ksJ0N2pq6W
  • A macro forex trading guide exploring how to trade the Euro vs the Swedish Krona and Norwegian Krone through the prism of the Core-Perimeter model. Get your market update from @ZabelinDimitri here:https://t.co/n6zwlZJmGO https://t.co/F8sLZvRG1q
  • If you missed today's session on IG Client Sentiment where I discussed the outlook for the #DowJones, $AUDUSD and $USDCAD while discussing fundamentals and technicals, check out the recording below and stay tuned for a full report! - https://t.co/2wVxhtItzX
  • Wall Street Futures Update: Dow Jones (+0.213%) S&P 500 (+0.175%) Nasdaq Composite (+0.242%) [delayed] -BBG
  • RT @margaretyjy: Watch my Bloomberg TV interview at 9:00AM Singapore time. Coming in soon! https://t.co/Z6u6offept
  • The Core-Perimeter trading model helps traders understand interactions between global economies, helping to trade the assets embedded in these relationships. Get your market update from @ZabelinDimitri here:https://t.co/dKRAo00lfA https://t.co/jw5uvZBvRx
ECB Makes No Changes to Policy, Euro Lower after Draghi Press Conference

ECB Makes No Changes to Policy, Euro Lower after Draghi Press Conference

2018-10-25 19:30:00
Christopher Vecchio, CFA, Senior Strategist
Share:

Talking Points

- As was widely anticipated, the ECB’s Governing Council kept its main rates on hold and signaled its continued intention to end its QE program in December 2018.

- The press conference with ECB President Draghi will be watched for a discussion on Italy, given the recent drama around their budget and rising Italian BTP yields.

- EUR/USD barely reacted to the October rate decision and policy statement, trading in a 13-pip range since the release.

See the DailyFX Economic Calendar and see what live coverage for key event risk impacting FX markets is scheduled for next week on the DailyFX Webinar Calendar.

Update

The Euro took a dive during ECB President Draghi's press conference this morning, and ahead of the US session close, no recovery has been staged thus far. While it was confirmed that the ECB will end its QE program in December 2018, it was also revealed that the ECB could consider other tools as it has in the past (i.e. TLTROs) if it were required to support a member country, namely, Italy. The dovish tilt gave traders fresh reason to sell the Euro over the course of Thursday.

EUR/USD Price Chart: 1-minute Timeframe (October 25, 2018) (Chart 1)

ECB Makes No Changes to Policy, Euro Lower after Draghi Press Conference

EUR/USD traded at 1.1407 before the rate decision this morning, and was last seen at 1.1366.

Original

The Euro is holding its ground this morning following the release of the European Central Bank’s October policy statement and rate decision. As was widely expected, the ECB’s Governing Council kept the main rates on hold; overnight index swaps were pricing in a 0% chance of a rate hike.

Similarly, it was indicated that the QE program will run its course until December 2018 as intended, as which point the ECB will keep rates on hold for “as long as needed,” a timeframe that ECB President Mario Draghi has indicated to mean sometime around “summer 2019.”

Since the June 2018 meeting, the Governing Council effectively has policy on a preset course, and without a new set of Staff Economic Projections, expectations for any change in policy were correctly extremely low Like the Federal Reserve (with its Summary of Economic Projections) or the Bank of England (with its Quarterly Inflation Report), the ECB has a multi-year track record of only making significant policy shifts at meetings when it has new economic forecasts in hand.

If there’s one item of interest to monitor during ECB President Draghi’s press conference, it’s neither the timing of ending QE nor when the first rate rise will occur, but rather how the ECB views the situation unfolding in Italy. European bond markets have been hurting recently, with contagion spreading from Italy to Spain in recent days; both countries’ sovereign bond yields are at multi-year highs, and their spreads versus Germany are widening out at a quick pace.

Such an environment – one marked by continued tensions between Rome and Brussels over the Italian budget, as well as lingering concerns about the Turkish Lira’s depreciation impact on European banks – leaves open the possibility that, if ECB President Draghi is to change tact at all, the shift would be in a more dovish direction.

EUR/USD Price Chart: 1-minute Timeframe (October 25, 2018) (Chart 2)

ECB Makes No Changes to Policy, Euro Lower after Draghi Press Conference

EUR/USD was barely changed around the rate decision, trading within a 13-pip range around 1.1407, from a low of 1.1402 to a high of 1.1415. Similar price action was observed among the EUR-crosses, with no pair making any significant advances or declines thus far.

Read more: Euro Forecast: Preliminary October PMIs and ECB Meeting on Tap

--- Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mailcvecchio@dailyfx.com

Follow him on Twitter at@CVecchioFX

View our long-term forecasts with theDailyFX Trading Guides

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

DISCLOSURES

News & Analysis at your fingertips.