johnscott
johnscott
Forex today was quite a ride.
The markets were braced for the ECB Governing Council meeting on Thursday that would be followed by an interest rate announcement and a very much foreseen press conference by President Mario Draghi in Frankfurt where markets were positioned for some classic jawboning considering the velocity of the surging euro and recent volatility of FX prices.
Indeed, markets were anticipating that Draghi would need to tread carefully on policy...but what followed was a big surprise...and then Trump came out and literally spun everything on its head...
First of all, it was evident that ECB policymakers were split on what their next move would be in relation to FX volatility, more than on how fast the euro has risen in fact. However, it was the confidence at which Draghi's hawkish rhetoric was delivered that surprised the most. In reflection, analysts at ING explained that it was hard for President Draghi to talk down the EUR when "its strength is driven by a solid domestic economy" and the soft USD while markets know that sooner or later, there will be a call for higher rates from the ECB.
Indeed, Draghi noted that the economy is the strongest it has been in more than a decade. Interestingly, without citing Mnuchin by name, Draghi clearly made reference to his remarks as noted by analysts at Brown Brothers Harriman....https://www.fxstreet.com/news/forex-today-what-a-ride-trump-ruins-the-day-201801252215
The markets were braced for the ECB Governing Council meeting on Thursday that would be followed by an interest rate announcement and a very much foreseen press conference by President Mario Draghi in Frankfurt where markets were positioned for some classic jawboning considering the velocity of the surging euro and recent volatility of FX prices.
Indeed, markets were anticipating that Draghi would need to tread carefully on policy...but what followed was a big surprise...and then Trump came out and literally spun everything on its head...
First of all, it was evident that ECB policymakers were split on what their next move would be in relation to FX volatility, more than on how fast the euro has risen in fact. However, it was the confidence at which Draghi's hawkish rhetoric was delivered that surprised the most. In reflection, analysts at ING explained that it was hard for President Draghi to talk down the EUR when "its strength is driven by a solid domestic economy" and the soft USD while markets know that sooner or later, there will be a call for higher rates from the ECB.
Indeed, Draghi noted that the economy is the strongest it has been in more than a decade. Interestingly, without citing Mnuchin by name, Draghi clearly made reference to his remarks as noted by analysts at Brown Brothers Harriman....https://www.fxstreet.com/news/forex-today-what-a-ride-trump-ruins-the-day-201801252215
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johnscott
FOREX -Dollar index slides to 3-year lows on broad-based weakness
... https://www.reuters.com/article/global-forex/forex-dollar-index-slides-to-3-year-lows-on-broad-based-weakness-idUSL4N1PJ21P
... https://www.reuters.com/article/global-forex/forex-dollar-index-slides-to-3-year-lows-on-broad-based-weakness-idUSL4N1PJ21P
· 1