On Monday, the US dollar index plunged from 96.40 to 95.70.
Highlights of the ECB meeting & press conference
As expected, the European Central Bank didn’t change monetary policy. The ECB confirmed that asset purchases at the new monthly pace of 30 billion are intended to run until the end of September 2018, or beyond, if necessary.
The ECB president Mario Draghi sounded positive about the euro zone’s economic health. This gives the central bank more confidence that inflation will head toward 2% target. At the same time, Draghi underlined that price pressure is building slowly. According to him, the recent volatility in the exchange rate is a source of uncertainty, so it’s necessary to continue monetary policy support.
Draghi pointed out that the ECB didn’t change its statement much as the situation remained almost the same. The central bank hasn’t really started a discussion on forward guidance.
“We don’t target exchange rates”, said Draghi. He noted that certain movements in exchange rates, which are justified by the economy, are natural. Now it’s too early to assess whether some recent comments caused unjustified movements in the Forex market. Anyway, Draghi repeated that the ECB doesn't target exchange rates.
EUR/USD jumped from 1.2400 to 1.2530. It seems that the market is eager to buy the euro no matter what is said.
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