Euro flies on Draghi - Nomura

Analysts at Nomura explain that against their expectations the ECB also maintained its guidance on the asset purchase programme (APP) by stating that “it stands ready to increase the size of the programme in terms of size and/or duration”, thereby propelling EUR higher.

Key Quotes

“On balance, we remain comfortable with our view for now that the ECB will announce a tapering plan at the next meeting on 7 September. No clear message from the ECB and President Draghi on the tapering announcement in September may slow the momentum of EUR appreciation, after recording a new high today. However, Mr Draghi’s benign view on the recent EUR appreciation should limit room for retracement, in our view. The latest flow picture also shows an improving medium-term flow picture and thus, we keep our structural bullish view on EUR.”