FXstreet.com (Córdoba) - The euro soared across the board and
rose above the 1.3200 mark versus the greenback after the European
Central Bank decided to keep its policy unchanged and President
Draghi offered no hints of future rate cuts.
Even though Draghi said that inflation risks were balanced and
economic risks were on the downside, comments were relatively
balanced. He also said the decision to hold interest rates steady
was unanimous, and noted the significant improvement in financial
"Today's ECB meeting went largely as we expected. There was no
change to any policy rates, and because of that, coupled with the
tone of the statement and Q&A, German yields and EUR/USD have
pushed higher", said the TD Securities team. "There was some
question on how resolutely rates would be left unchanged this
month, and by affirming that it was unanimous, as opposed to the
'wide discussion' last month, this was the largest driver for
market moves today. We continue to expect that the ECB is not done
lowering interest rates, but it clearly is not in any rush to add
some additional easing to the mix".
The euro and stocks were also bolstered by solid demand at a
Spanish debt auction and solid Chinese data. Meanwhile, the yen is
among worst performers on Thursday amid media reports suggesting
the BoJ may adjust its inflation target and ease monetary policy
further at its January meeting.
Euro rises above 1.3200, short-term bias turns
Having broken above the 1.3140 resistance area and the 1.3200
psychological level, EUR/USD short-term perspective has turned
positive, with the 1.3250 level coming into view ahead of 1.3300.
On the other hand, dips should now be contained by the 1.3140/50
area in order to keep the positive bias alive. EUR/USD was last up
1.2% on the day at the 1.3215 area, having been as high as 1.3222.
"Given the favorable news developments from Europe and China we
have a bias for further currency gains, at least until (or unless)
the next round of U.S budget talks become a more significant for
investors and dampens broader market sentiment", says Nick
Bennenbroek, Head of Currency Strategy, Wells Fargo Bank.