At its monetary policy meeting held today, the Governing Council of the European Central Bank (ECB) decided to leave the interest rates on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility unchanged at 0.00%, 0.25% and -0.40%, respectively. Attention now turns to the ECB President Mario Draghi’s press conference at 13:30 GMT.
Key highlights from the official statement
- The Governing Council now expects the key ECB interest rates to remain at their present levels at least through the end of 2019.
- The Governing Council intends to continue reinvesting, in full, the principal payments from maturing securities purchased under the asset purchase programme for an extended period of time past the date when it starts raising the key ECB interest rates.
- A new series of quarterly targeted longer-term refinancing operations (TLTRO-III) will be launched, starting in September 2019 and ending in March 2021.
- The Eurosystem’s lending operations will continue to be conducted as fixed rate tender procedures with full allotment for as long as necessary, and at least until the end of the reserve maintenance period starting in March 2021.
EUR: Hard sell? – Rabobank.
According to Jane Foley, senior FX strategist at Rabobank, the relative weakness of EUR through most of this year can be linked to disappointing Eurozone growth data, expectations regarding more policy accommodation from the ECB and an increase in political jitters stemming from the forthcoming general election in Spain and the May European parliamentary elections
EUR/USD Technical Analysis: Set-up favors bearish traders, dovish ECB message awaited for confirmation.
Barring a couple of knee-jerk reactions, the pair has been steadily recovering along an ascending trend-channel formation on intraday charts.
About ECB’s press conference
Following the ECB ´s economic policy decision, the ECB President gives a press conference regarding monetary policy. His comments may influence the volatility of EUR and determine a short-term positive or negative trend. His hawkish view is considered as positive, or bullish for the EUR, whereas his dovish view is considered as negative, or bearish.