The European Central Bank was expected to leave the main lending interest rate unchanged at 0.75% and the deposit rate at 0%.
EUR/USD was trading just above the 1.30 line before the publication and is now trading a bit higher, though within a limited range. The focus now shifts to the press conference of Mario Draghi, at 13:30 GMT. Stay tuned for a live blog of the event.
Update: Draghi Maintains Balanced Stance – EUR/USD Jumps.
Most analysts expected the ECB to leave rates unchanged, keeping the powder dry for worse times, even though the situation is already far from being OK. This could wait for the LTROs to unwind.
The unemployment rate has risen, inflation is finally under the 2% target and apart from Germany, there are no signs of growth to be seen.
Also German growth in Q1 is somewhat in doubt: while business sentiment is higher, factory orders are lower. Not all indicators point to a return to growth after a contraction in Q4.
Here is some more information towards the press conference:
- The next selloff of the euro could come from Mario Draghi
- EUR could rise violently if Draghi provides a pro-euro speech
- And for more technical lines and analysis, see the weekly euro to usd forecast.
