Euro Eases After ECB Draghi Says Governing Council Didn't Discuss QE Exit
April 27 2017 - 6:26AM
RTTF2
The euro retraced its gains against its major rivals in the
early New York session on Thursday, after the European Central Bank
President Mario Draghi didn't signal a shift in the bank's policy
stance, saying the region's underlying inflation pressures still
remain subdued and inflation outlook has not improved yet.
In his customary press conference post-ECB decision, Draghi said
that although the euro area economy has become solid and downside
risks have diminished further, underlying inflation pressures
continue to remain subdued and have to show a convincing upward
trend yet.
"A very substantial degree of monetary accommodation is still
needed for underlying inflation pressures to build up and support
headline inflation in the medium term. If the outlook becomes less
favourable, or if financial conditions become inconsistent with
further progress towards a sustained adjustment in the path of
inflation, we stand ready to increase our asset purchase programme
in terms of size and/or duration," Draghi said.
At its meeting in Frankfurt, the Governing Council kept all its
three interest rates unchanged for a ninth consecutive policy
session.
The main refi rate was held at a record low zero percent and the
deposit rate at -0.40 percent. The marginal lending facility rate
was kept at 0.25 percent.
The euro was broadly higher against its major rivals, with the
exception of the pound in the European session.
The euro weakened to a 3-day low of 1.0810 against the franc and
a 9-day low of 0.8425 versus the pound, from its early highs of
1.0848 and 0.8495, respectively. The next possible support for the
euro is seen around 1.07 against the franc and 0.83 against the
pound.
The single currency reversed from an early high of 121.89
against the yen, ticking down to 120.92. The euro is seen finding
support around the 118.00 area.
The Bank of Japan kept its monetary stimulus unchanged as widely
expected.
Governor Haruhiko Kuroda and his board members decided by an 7-2
majority vote to hold its target of raising the amount of
outstanding JGB holdings at an annual pace of about JPY 80
trillion.
The euro slipped to a 2-day low of 1.0853 against the greenback,
after having advanced to 1.0933 at 8:30 am ET. On the downside, the
euro may find support around the 1.07 mark.
The common currency was trading lower at 1.4583 against the
aussie and 1.4776 against the loonie, down from its early 4-month
high of 1.4641 and a 2-day high of 1.4892, respectively.
Continuation of the euro's downtrend may see it challenging support
around 1.44 against the aussie and 1.46 against the loonie.
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