After cutting the lending rate to a new historic low of 0.50%, Mario Draghi faced the press in the post-decision press conference. While he didn’t present any SME program, Draghi leaves the door open for further rate cuts. Towards the end of the presser, Draghi made a very thick hint about a negative deposit rate, and sent the euro crashing. Live blog of the event. More: Are negative interest rates really possible? Yes they are Highlights Economic risks remain ‘on the downside’ No SME program was presented. Inflation risks are broadly balanced. Stand ready to act if needed There was a very strong pervading consensus towards an interest rate cut, within that consensus towards 0.25% cut. ECB has an open mind on negative deposit rate: EUR/USD crashes. Full analysis of the hint and crash here. Live Blog 12:20 GMT. Press conference begins at 12:30. All times are GMT. 12:29 EUR/USD cooling to around 1.3180. 12:32 Press conference begins, EUR/USD rises to 1.32. 12:35 ECB will remain accomodative. 12:37 Draghi: we are closely monitoring money mrkt conditions, we decided to continued to extend full allotment of liquidity to 8 July 2014. 12:38 Economic weakness extended into the spring. 12:40 ECB consulting with other European institutions on helping small businesses, but actually the ECB is not presenting a new plan. 12:42 Labor conditions remain weak, short indicators signal weak activity, second half recovery still expected. 12:43 Economic risks rmain on the downside. EUR/USD lower. 12:45 Inflation risks are broadly balanced. 12:47 In the meantime, US jobless claims came out better than expected: only 324K. 12:48 recent data confirm that the underlying pace of monetary expansion continues to be subdued 12:49 we will certainly look at all incoming data and stand ready to act if needed. Dovish hint? 12:50 fragmentation of eurozone credit markets must decline further, progress has been made in improving funding situation of banks. 12:52 Draghi: there cannot be fears of lack of funding as an excuse for not lending.EUR/USD falling to 1.3160. 12:53 we believe restriction of the rate corridor will reduce volatility of Eonia, will help all kinds of banks (under ELA as well). 12:54 We believe the combination of measures will be effective. 12:55 Don’t underestimate full allotment through July 2014 12:57 decrease in target 2 balances is the best sign that there is a gradual improvement in sentiment. 12:57 Draghi: austerity vs growth, its an interesting debate 12:59 second stage of crisis, have self fulfilling expectations of disruptive scenarios taking momentum, got rid of this thru OMT. 13:00 2nd fiscal consolidation is contractionary in short & medium term so need to mitigate this, don’t do it by raising taxes. 13:02 proceed with structural reforms, many of the problems in labour mrkt, tax area have nothing to do with monetary policy 13:03 there was a very strong pervading consensus towards an interest rate cut, within that consensus towards 0.25% cut. EUR/USD lower. 13:06 ECB can’t supplant governments for their lack of structural reforms, ECB can’t clean bank balance sheets. EUR/USD now back up to 1.3190. 13:09 need to find a way to package these loans so that they can be priced, other institutions more suited to this, i.e. EIB & Commission. EUR/USD getting closer to 1.32. 13:11 ECB independence is dear to all, especially German citizens. 13:12 Draghi says ECB is technically ready to cut deposit rates 13:14 ECB has an open mind on negative deposit rate. EUR/USD crashes. 13:17 There are possible consequences to deposit rate cut but we are prepared to act to mitigate these. EUR/USD at 1.3080. 13:20 let’s not forget that the weakness is spreading to countries where the problem of transmission was not present. 13:22 the trade off to more time should not be compromise to ultimate objectives set by EU. 13:28 The words about a negative deposit rate continue to hurt the euro. 1.3070. 13:35 Press conference ends with EUR/USD on the ropes due to the hints. See analysis: Draghi Open to “Nuclear Option” – a Negative Deposit Rate – EUR/USD Crashes Background ECB cuts the main lending rate from 0.75% to 0.50% and the marginal rate from 1.50% to 1%. The deposit rate was left unchanged at 1%. EUR/USD responded by moving higher immediately afterwards, because the ECB didn’t go to far. 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 Draghi Open to “Nuclear Option” – a Negative Deposit Yohay Elam 9 years After cutting the lending rate to a new historic low of 0.50%, Mario Draghi faced the press in the post-decision press conference. While he didn't present any SME program, Draghi leaves the door open for further rate cuts. Towards the end of the presser, Draghi made a very thick hint about a negative deposit rate, and sent the euro crashing. Live blog of the event. More: Are negative interest rates really possible? Yes they are Highlights Economic risks remain 'on the downside' No SME program was presented. Inflation risks are broadly balanced. 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