EUR/USD: ECB failed to drag it down – Danske Bank

Allan von Mehren, chief analyst at Danske Bank, notes that the Draghi’s emphasis on ECB’s willingness to meet its inflation target failed to send EUR/USD lower yesterday and indeed financial markets lack confidence in the ECB if break-even inflation is anything to go by.

Key Quotes

“EUR/USD dropped temporarily from around 1.1280 before the meeting to around 1.1230-40 on the low-for-even longer stance from the ECB.”

“In our view, ECB yesterday did not provide arguments for a much lower EUR/USD from here and we stick to our call for the cross to trade around 1.13 in 3M.”

“FOMC minutes last night did provide much new information even if the Fed – again – stressed that rates can go either way from here.”