Trading Forex and CFDs is risky
Read HotForex Daily Market Analysis

ECB Delivers for at least 9 months

Market Analysis

EURUSD, H1

ECB extends QE for 9 months at EUR 30 bln. This is down from currently EUR 60 bln, but the ECB also maintained the option of extending in size or duration if needed, so there still is no firm end to QE and the easing bias on asset purchases remains in place as we expected. All in all pretty much in line with expectations and maintaining an overall dovish stance, despite the fact that monthly asset purchases will be halved form next year. That still adds a further EUR 270 bln to the central bank’s balance sheet and with no firm commitment to an end date for asset purchases. Rates were of course also kept on hold and the central bank repeated again that rates will remain at low levels well past the end of asset purchases, which should exclude rates rates before early 2019 at the earliest. After both Markit PMIs as well the Ifo reported mounting capacity pressures, we saw a good chance that the hawks at the ECB would win out and that monthly purchase volumes would be cut back even further, so this is somewhat more dovish than we expected and what markets positioned for this week, which meant Bund futures jumped higher on the announcement.

EUR crosses, having been bid up all morning took an immediate hit. EURUSD fell from the morning high at 1.1830 to sub 1.1750, EURJPY  broke below 134.00 and EURGBP dipped below 0.8900.  Mr Draghi just getting to his feet.

 

Click here to access the HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! The next webinar will start in:

Stuart Cowell

Senior Market Analyst

HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.