4 Apr 2014
EUR faces bigger downside risks - BTMU
FXStreet (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ, believes the EUR could weaken further after yesterday's ECB meeting.
Key Quotes
"The euro has weakened modestly following yesterday’s ECB monetary policy meeting at which the ECB clearly signalled that it is prepared to utilise unconventional monetary policy easing if needed, although still decided to leave monetary policy unchanged at yesterday’s meeting. The ECB acknowledged that the low euro-zone inflation reading from March had taken them by surprise but wanted to assess inflation developments in the coming months before they decide whether lower inflation requires further monetary easing."
"President Draghi was keen to stress that the ECB can act swiftly to ease monetary policy and that QE and lowering the deposit rate into negative territory were discussed at yesterday’s meeting. The ECB remains undecided over the exact form of QE which creates uncertainty over the potential size of asset purchases."
"The ECB also stated that it will monitor closely the euro which is viewed as increasingly important. The increased likelihood of the ECB adopting more effective monetary easing measures ahead which could lift inflation expectations and lower real yields have increased downside risks for the euro."
Key Quotes
"The euro has weakened modestly following yesterday’s ECB monetary policy meeting at which the ECB clearly signalled that it is prepared to utilise unconventional monetary policy easing if needed, although still decided to leave monetary policy unchanged at yesterday’s meeting. The ECB acknowledged that the low euro-zone inflation reading from March had taken them by surprise but wanted to assess inflation developments in the coming months before they decide whether lower inflation requires further monetary easing."
"President Draghi was keen to stress that the ECB can act swiftly to ease monetary policy and that QE and lowering the deposit rate into negative territory were discussed at yesterday’s meeting. The ECB remains undecided over the exact form of QE which creates uncertainty over the potential size of asset purchases."
"The ECB also stated that it will monitor closely the euro which is viewed as increasingly important. The increased likelihood of the ECB adopting more effective monetary easing measures ahead which could lift inflation expectations and lower real yields have increased downside risks for the euro."