Currency traders were put through their paces during Draghi’s press conference Thursday.
The ECB left its benchmark rates unchanged, failing to grasp the nettle and stimulate the economy by opting for a negative deposit rate. The policy statement did, however, appear to take a step closer to adopting quantitative easing, which Mr. Draghi said culminated this month in a “rich discussion” on the topic. Last month, he said, there was no discussion on the topic. The sensation that a strengthening currency has started to feed through to threateningly lower inflation has shifted opinion around the Eurozone with many suggesting the ECB will ultimately move to buy bonds, much like other central banks in an effort to stimulate growth. Despite the discussion, the ECB failed to announce a move in April. QE might weaken the euro currency, while failure to act might lift the unit. Such failure to act might make the onset of QE inevitable in the future. As a result and as the intraday chart clearly illustrates, traders haven’t got a clue what to do with the euro currency!
Euro currency broke the range at both ends as Draghi spoke