The European Central Bank left the main lending rate unchanged at 0.75% and the deposit rate at 0%. The move was widely expected, even though a rate cut wasn’t ruled out.
EUR/USD traded steadily around the 1.31 line prior to the publication. It slid to 1.3092 before the actual call and leaps to 1.3115 immediately afterwards. The focus now shifts to the press conference by Mario Draghi.
Update: Follow Draghi’s press conference here.
Analysis: EUR/USD Powers Higher on Draghi’s Words
The slide in inflation and the ongoing recession in the euro-zone supported a rate cut. In addition, some members wanted a rate cut last month.
On the other hand, the debt crisis has faded away, and this could be seen also now in the recent Spanish bond auction.
Draghi will hold a press conference at 13:30 GMT and is likely to provide more information about the current situation – recession is probably stabilizing.
For more, see the EUR/USD forecast.
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