Analysts at TD Securities point out that the ECB left policy unchanged and kept its guidance intact for “rates to remain at their present levels at least through the summer of 2019”, as per expectations.
“Some dovish risks, however, were realized. Notably, the ECB downgraded its risk assessment, noting that risks “have moved to the downside.” This sets a higher hurdle for liftoff after the summer.”
“The rest of Draghi’s statement and press conference continued to strike a confident tone, particularly over cost pressures and inflation. For now the ECB remains comfortable with its policy guidance.”
“Ultimately though, it is the persistence of uncertainties weighing on the outlook that could delay liftoff. Should data continue to disappoint in the coming months, a change in policy guidance will become more likely.”
“We think EURUSD is likely to remain confined to recent ranges until fresh catalysts emerge. Both legs face an increasingly challenging outlook. Instead EUR bears may find greater satisfaction in EURJPY shorts if the recent rebound in risky assets runs out of steam.”