Yesterday, the euro skyrocketed as ECB President Draghi disappointed those who expected him to talk down the currency aggressively. Later in the day, US President Trump woke up some USD buyers after he expressed his desire for a stronger dollar.
ECB Chief Fails to Talk Down the Euro
The euro traded higher against most of its G10 counterparts yesterday. It gained the most against GBP, NZD and AUD, in that order, while it underperformed against SEK, CHF, and NOK. The common currency ended the day virtually unchanged against USD. However, the ride was not so quiet as someone would have guessed by looking at the daily performance only.
Yesterday, the ECB decided on policy for the first time in 2018. As was widely expected, the Bank left its policy untouched, while no changes were made on language or forward guidance. However, in the introductory statement of the press conference we saw the return of the excerpt referring to “the recent volatility in the exchange rate represents a source of uncertainty which requires monitoring”. This part was included back in September. Remember, we highlighted the likelihood for the come-back of that phrase yesterday.
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