- ECB President
Trading the News: European Central Bank Interest Rate Decision
According to a
Why Is This Event Important:Indeed, the ECB is coming under increased pressure to implement more non-standard measures amid the persistent threat for deflation, and we may see the central bank lay the groundwork to ease policy further in the coming months as the
Expectations: Bearish Argument/Scenario
Euro-Zone Consumer Price Index (YoY) (APR A)
Euro-Zone Economic Confidence (APR)
Euro-Zone M3 Money Supply (YoY) (MAR)
Subdued price growth paired with the ongoing contraction in private sector lending may prompt the ECB to adopt a more dovish outlook for monetary policy, and we may see the EUR/USD give back the advance from the beginning of the month should the fresh batch of central bank rhetoric drag on interest rate expectations.
Risk: Bullish Argument/Scenario
Euro-Zone Retail Sales (MoM) (MAR)
Euro-Zone Unemployment Rate (MAR)
Euro-Zone Trade Balance s.a. (MoM) (FEB)
However, the ECB may stick to the sidelines amid the positive developments coming out of the monetary union, and the EUR/USD may continue to carve higher highs & higher lows in May should the central bank remain reluctant to implement more non-standard measures.
How To Trade This Event Risk(Video)
*Trading the ECB interest rate decision may not be as clear cut as some of our other trade setups as the press conference with President Draghi ends with a Q&A session
Bearish EUR Trade: ECB Ramps Up Dovish Tone/Sets Expectations for More Easing
Bullish EUR Trade: Governing Council Retains Wait-and-See Approach
Potential Price Targets For The Rate Decision
Impact that the European Central Bank Interest Rate Decision has had on EUR/USD during the last meeting
(1 Hour post event )
(End of Day post event)
The ECB kept rates on hold once more in April and stated that the central bank was not excluding the use of unconventional tools if needed. Although the rate decision sent the Euro higher, when Draghi took the stage and said that the use of unconventional tools was a possibility, we saw Euro weakness across the board. Volatility was relatively weak as has been the case over the last few weeks. Market participants will note Draghi's language in regards to the Euro as he has become more comfortable in using his position to talk down the Euro.
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