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.

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
Subscribe
Please try again
More View more
Real Time News
  • Retail trading platform Robinhood announces hire of new Chief Compliance Officer amid regulatory scrutiny
  • There is a ridiculous number of scheduled Fed speeches on the docket next week. Powell specifically will be speaking multiple times including at an ECB hosted forum on central banking (which also has a panel with Fed, ECB, BOE and BOJ heads)
  • USD Ascending Triangle, Bullish for Q4 - #DXY chart on @TradingView https://t.co/iCnRSo9N4V
  • Credit rating agency Standard & Poor's is due to give its sovereign credit rating update on Germany today ahead of weekend national elections
  • RT @BIS_org: Since the early 1990s, changes in the #MonetaryPolicy stance have affected a rather narrow set of prices – mostly in the servi…
  • Huawei's CFO Meng Wanzhou reached deal with the US Dept of Justice to return her to China - Dow Jones
  • Cleveland Fed President Loretta Mester says: - sees US GDP in 2022 between 3.75 and 4% - Supports tapering in November and concluding over the first half of 2022 - After liftoff, accommodative policy needed for some time
  • Fed Chairman Jerome Powell doesn't comment on the growth forecast or monetary policy in his introductory remarks
  • Kansas City Fed President Esther George says: - The labor market friction is fading barring a resurgence of virus - A 'normal' economy is likely to remain elusive for some time - Asset buying effects complicate the judging rate change plan
  • The risk rally that charged the S&P 500 and brethren post-FOMC has stalled into Friday's open. DailyFX's @JohnKicklighter discusses what is driving markets post Fed👇 https://t.co/qNuVaDrZPe
ECB Meeting: EUR/USD Whipsaws as Policy Left Unchanged With Continued Dovish Message

ECB Meeting: EUR/USD Whipsaws as Policy Left Unchanged With Continued Dovish Message

Daniela Sabin Hathorn, Analyst

Key Talking Points:

  • EUR/USD jumps then reverses as ECB delivers policy guidance
  • Inflation continues to be below target
  • Asset purchases to remain in place until rate hike is necessary

EUR/USD has attempted to pick up some bullish momentum as the European Central Bank leaves monetary policy unchanged, but the gains have quickly reversed. The pair has been stuck in a descending trend since the beginning of June when the US Dollar started picking up bullish momentum, falling close to a 4-month low on the back of concerns regarding economic recovery and inflationary pressures in the Eurozone. Although the unchanged policy was largely expected, it is also viewed as a slightly positive tilt for the euro as there was also talk about a possibility of loosening conditions even further.

One of the key remarks of the press release is that rates have been close to their lower bound for some time and the medium-term outlook for inflation is still well below its target, although they do expect inflation to be moderately above target in a transitory period.

The central bank has stuck to its current pace of asset purchases to reinforce the accommodative impact of its policy rates, and is expected to hold until it is ready to start raising rates. The ECB is viewed as one of the more dovish banks in Europe so today’s remarks are no surprise for markets, which were largely expecting the message to be unchanged.

Watch ECB President Christine Lagarde and Vicepresident Luis De Guindos explain the Governing Council's decision at the live presser at 13.30 BST.

Advertisement

EUR/USD 1-minute chart

EUR/USD 1 min chart

Learn more about the stock market basics here or download our free trading guides.

--- Written by Daniela Sabin Hathorn, Market Analyst

Follow Daniela on Twitter @HathornSabin

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

DISCLOSURES