After leaving policy unchanged, ECB president Mario Draghi faces the press. He is expected to re-iterate the pledge for low rates and perhaps acknowledge the green shoots in Europe. Live blog of the event that always shakes the euro. Highlights Draghi re-iterates forward guidance for low rates. Sees tentative signs of stabilization and some growth in H2 2013, 2014. Calls for more action from governments. Decisoin on forward guidance was unanimous. Draghi avoids answering question about cutting rates. Different communications policy will be discussed in the fall. EUUR/USD slides below 1.32 and then stabilzies. Live Blog 12:15 GMT Press conference begins at 12:30, all times are GMT. 12:15 You can watch the event live here. 12:16 EUR/USD trading at 1.3230 towards the publication. 12:16 At the same time that Draghi begins talking, the US will release its weekly jobless claims report. 12:18 EUR/USD made a false break above 1.33 after the FOMC, and returned back to range. We could see false breaks in either direction now. 12:20 Draghi is expected to say the keywords “downside risks” at the beginning of his statement. This is not new. 12:22 Draghi might be asked about Greece’s funding hole, if the decision was unanimous and about the negative deposit rate, an option which Draghi is always open to. 12:25 In August of last year, Draghi annonuced the willingness of the ECB to intervene in bond markets. So, August is not a month of rest for the ECB. 12:27 Support is at 1.32, followed by 1.3160. Resistance is clearly at 1.33, followed by 1.3350. 12:29 Press conference about to begin. 12:30 US jobless claims fall to 326K – good news. 12:30 Credit dynamics remain subdued, EUR/USD falls to 1.3200. 12:31 Further improvement from low levels, tentatively confirm stabilization. EUR/USD also stabilizes. 12:32 Promoting money market conditions, improvement in remainder of 2013 and in 2014. 12:32 Draghi re-iterates forward guidance – EUR/USD loses 1.32. 12:32 We will monitor all incoming information and assess everything. 12:33 Recent confidence indicators show stabilization and tentatively show improvement. However, labor market conditions remains weak. 12:34 Domestic demand should be supported by monetary loosening. EUR/USD above 1.32. 12:34 Imprvoement making its way to real economy. 12:35 EZ economy should stabilize and remain at low pace. 12:35 Recent glboal developments could weigh on economies. 12:35 Lack of structural reforms could weigh as well. 12:36 Inflation could further fall, depending on energy, among others. 12:36 Economies likely to remain subdued. Risks for price development are broadly balanced. 12:37 Loans to household are broadly unchanged. Weak loan dynamics reflect current state of business cycle. 12:38 Sicne mid 2012, the financial sitaution has improved. Essential that the fragmentation declines further. 12:38 Banking union much needed. 1239 EUR/USD now recovering to 1.3222. 12:40 Euro-area countries should not stop pursuing balanced budgets, though growth friendly. 12:41 Structural reforms should be stepped up: removing rigidities in labor markets, encouraging competition, and fighting youth unemployment. 12:42 Questions begin, EUR/USD higher 12:42 Tentatively confirm stabilization. Draghi repeats statement. 12:43 Decisoin on forward guidance was unanimous. 12:44 How long will this horizon be? As long as inflation is subdued and weakness is all around. 12:44 Liquidity will remain abundant, Draghi stresses. 12:45 No relation between liquidity limits and forward guidance for rates. 12:46 In order to change the guidance, situation needs to change. 12:47 Question about credit contraction: 12:48 Draghi avoids answering question about cutting rates. 12:48 Underlying growth remains subdued. We know there are several reaons: weak demand, heightened credit risk, continued deleveraging, fragmentation on the supply side, etc. Improvement expected. 12:49 Deposit fragmentation is over on the credit front, but on lending, there is some fragmentation. 12:50 Credit growth is an indicator of growth, and the real economy will witness a delay in growth. 12:50 EUR/USD continues recovering, and is already back to the pre-conference levels. 12:51 Question: Will you be introducing minutes or qualitative targets. No qualitative guidance. 12:52 Regarding minutes, ECB has presented forecasts. The governing council talked about enhancing communications. 12:53 Draghi takes his time discussing communications. At this early stage, “I can only be relatively general”. A rationale will be given. But, we are not a one country setup. 12:54 Because it is a 17 member council, releasing minutes should be respectful of this special ingredient of the policy. 12:55 More communications will be discussed in the fall. 12:56 The ECB wants more communications but without politicization of the process. 12:57 Question: are we still in recession? Was the decision on rates unanimous? Draghi says only forward guidance was discussed. 12:59 Draghi also avoids answering the recession question. 13:00 Draghi asked again about no discussion about rate cuts: 13:01 “We haven’t reached a zero bound”. 13:02 Draghi repeats forward guidance statement. 13:02 Question about collateral rules: 13:03 Will the forward guidance be revised monthly? No, we will repeat it only if you don’t get it. 13:04 If we repeat it each time, the markets might think it is “not for a extended period of time” but only for one month… 13:05 On ABS, we now have lower haircuts than beforehand. 13:05 Draghi talks about collaterl rules. In the meantime, EUR/USD is at 1.3230. 13:07 EUR/USD ticks lower to 1.3225 – movements are quite limited. 13:08 There are many questions about communications… 13:09 How will we know when forward guidance has been removed? Draghi says it’s far. 13:10 Draghi refers to the issues the Fed has with communicating tapering. 13:12 Draghi repeats the parameters for the forward guidance. 13:12 Question: what do you think about minutes? Answer: I have to be unspecific. 13:15 Liquidity will remain ample as long as it’s needed. 13:16 Interest rate channel is part of the wway to policy reaching the real economy. 13:18 OMT is not the answer to everything. 13:21 The picture is better than a year ago, from all angles. 13:23 Draghi sounds upbeat by saying that “something has happened regarding competitiveness”, and stresses it is not only the OMT. 13:24 Highly premature to comment on communications. 13:35 Press conference ends – Draghi wishes everybody good holidays. EUR/USD ends at 1.3234. Could rise from here. Background The ECB abandoned its “we never pre-commit” policy and committed to keeping rates at these levels or lower for an “extended period of time”. This sent the euro lower back in July. Draghi wanted to “inject a downward bias”. On the other hand, there have been some green shoots of late: better PMIs in many European countries, rising business confidence and even a drop in Spanish unemployment. Given Draghi’s tendency to move from pessimism to optimism, today is optimism’s turn. But, you never know. Opinion: ECB may try to avoid rate cut if possible Yohay Elam Yohay Elam Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts. Yohay's Google Profile View All Post By Yohay Elam Forex News Today: Daily Trading News share Read Next Forex Crunch Key Metrics July 2013 Yohay Elam 9 years After leaving policy unchanged, ECB president Mario Draghi faces the press. He is expected to re-iterate the pledge for low rates and perhaps acknowledge the green shoots in Europe. Live blog of the event that always shakes the euro. Highlights Draghi re-iterates forward guidance for low rates. Sees tentative signs of stabilization and some growth in H2 2013, 2014. Calls for more action from governments. Decisoin on forward guidance was unanimous. Draghi avoids answering question about cutting rates. Different communications policy will be discussed in the fall. EUUR/USD slides below 1.32 and then stabilzies. 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