EUR/USD plummets to 1.0650 on Draghi’s presser

The shared currency is now suffering the dovish tone from President M.Draghi at his press conference, dragging EUR/USD to the mid-1.0600s, fresh daily lows.

EUR/USD weaker, retreats from 1.0880

The pair has quickly faded the initial spike to the 1.0880/90 band following the announcement that the central bank will modify its QE programme starting in April 2017.

In fact, President Draghi argued that the asset purchase programme will be modified in January, adding that the bank will purchase assets below the deposit rate, decreasing the maturity bound to 1-year.

The ECB will reduce its pace of monthly purchases to €60 billion from €80 billion, starting in April 2017 and intended to run until the end of December 2017, although its extension and size could be modified if necessary.

Draghi said that rates will remain at current or lower levels for an extended period of time.

The ECB Governing Council has also updated its forecasts for growth and inflation in the region, and it now sees 2016 GDP at 1.7%, 2017 GDP at 1.7% and 2018 GDP at 1.6%. Regarding inflation, HICP is seen rising at an annualized 0.2% this year, 1.3% in 2017 and 1.5% in 2018.

As the press conference is under way, President Draghi has stressed that ‘tapering’ has not been discussed (adding extra selling to EUR).

EUR/USD levels to watch

The pair is now losing 0.90% at 1.0658 facing the next support at 1.0505 (2016 low Dec.5) ahead of 1.0456 (2015 low Mar.13). On the upside, the initial hurdle aligns at today’s spike at 1.0873.