Yesterday, the ECB left policy unchanged as expected, and maintained its confidence despite the moderation in economic activity. During the Asian morning Friday, the BoJ stood pat as well, but dropped the timeframe for reaching its inflation target.
ECB Still Confident, Despite Slowdown in Euro-area Activity
The euro ended the day lower against all but two of the other G10 currencies. It slightly outperformed CHF, while it recorded strong gains against SEK, which tumbled after the Riksbank pushed further back the timing of when it expects to start raising rates.
Yesterday, the event of the day was the ECB meeting, and more precisely the press conference held by President Draghi after the decision. The Bank kept its monetary policy untouched, while it made no changes to the statement accompanying the decision. Given that this was widely anticipated, the euro remained unfazed at the time of the release.
However, Draghi’s press conference thereafter gained more attention. As we noted yesterday, investors were eager to find out whether he will appear worried with regards to Eurozone’s economic momentum or not. In the introductory statement, the president noted that incoming information since the March meeting points to some moderation, while remaining consistent with a solid and broad-based expansion of the economy. “This moderation may in part reflect a pull-back from the high pace of growth observed at the end of last year, while temporary factors may also be at work”, Draghi noted.
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