The latest ECB decision is providing a bit of confidence for the euro, resulting in gains for the 18-nation currency. However, the gains might be short-lived, depending on what ECB President Mario Draghi has to say about the future of the eurozone’s monetary policy.
The euro is recovering from some of its earlier losses today, thanks to the fact that the European Central Bank decided not to take action and cut rates. Many had thought that recent economic data would prompt policymakers to cut rates by now, but the ECB kept the situation steady, with rates remaining at 0.25 per cent.
With a disappointing inflation report, and retail sales that came in below expectations, some had been betting on an ECB cut now. However, this didn’t happen, and the ECB showed its propensity for slow movement and careful thought before making such decisions.
The euro isn’t out of the woods yet, however. ECB President Mario Draghi still needs to make his statement about the situation. As a result, there are still questions about what might be next for the eurozone and for the euro. It could still break lower.
At 13:55 GMT EUR/USD is up to 1.3587 from the open at 1.3538. EUR/GBP is also higher, rising to 0.8333 from the open at 0.8300. EUR/JPY is up to 137.6430 from the open at 137.2565
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