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7 Mar 2014
Flash: EUR/USD bolstered by ECB - BTMU
FXStreet (Barcelona) - Derek Halpenny, European Head of Currency Strategy at the Bank of Tokyo Mitsubishi UFJ, remarked the better mood of the EUR/USD post ECB.
Key Quotes
"The euro remains well underpinned at the start of London trading with the ECB decision yesterday to leave its monetary stance unchanged the key factor. Our lower EUR/USD view for 2014 (1.3000 end-Q4) is partly based on further action by the ECB as inflation drifts lower, so the inaction and the rhetoric has certainly increased the risk that the ECB may be done."
"However, it remains too early to reach that conclusion just yet. The presentation of the latest staff forecasts does indicate that there is a reluctance to act again – probably due to the Council being divided over the outlook for inflation."
"But the ECB failed to act yesterday despite inflation projections of 1.0%, 1.3% and 1.5% over the next three years. The ‘get-out-of-jail card’ for the ECB was the projection that annual inflation would hit 1.7% by Q4 2016."
Key Quotes
"The euro remains well underpinned at the start of London trading with the ECB decision yesterday to leave its monetary stance unchanged the key factor. Our lower EUR/USD view for 2014 (1.3000 end-Q4) is partly based on further action by the ECB as inflation drifts lower, so the inaction and the rhetoric has certainly increased the risk that the ECB may be done."
"However, it remains too early to reach that conclusion just yet. The presentation of the latest staff forecasts does indicate that there is a reluctance to act again – probably due to the Council being divided over the outlook for inflation."
"But the ECB failed to act yesterday despite inflation projections of 1.0%, 1.3% and 1.5% over the next three years. The ‘get-out-of-jail card’ for the ECB was the projection that annual inflation would hit 1.7% by Q4 2016."