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4 Apr 2014
ECB reinforces potential for unconventional easing measures - ANZ
FXStreet (Bali) - Brian Martin, Senior European Strategist at ANZ Research, notes that on Thursday's ECB press conference, Draghi took the opportunity to reinforce the possible use of unconventional policies.
Key Quotes
The ECB left interest rates unchanged despite the fall in March headline inflation to 0.5% y/y but took the opportunity to reinforce forward guidance, in particular the possible use of unconventional policies. The euro weakened as a result.
"The absence of action on interest rates and unfolding recovery illustrate the difficulties that the ECB has in trying to weaken the euro, especially against a backdrop of a large current account surplus. It seems increasingly reliant on jawboning to contain the exchange rate."
"We continue to expect euro area fundamentals to remain supportive for the currency, particularly on the crosses. Against the USD, it will be necessary to see the US March labour market data before forming an opinion about near-term direction."
Key Quotes
The ECB left interest rates unchanged despite the fall in March headline inflation to 0.5% y/y but took the opportunity to reinforce forward guidance, in particular the possible use of unconventional policies. The euro weakened as a result.
"The absence of action on interest rates and unfolding recovery illustrate the difficulties that the ECB has in trying to weaken the euro, especially against a backdrop of a large current account surplus. It seems increasingly reliant on jawboning to contain the exchange rate."
"We continue to expect euro area fundamentals to remain supportive for the currency, particularly on the crosses. Against the USD, it will be necessary to see the US March labour market data before forming an opinion about near-term direction."