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EUR/USD Down as ECB Considers QE

April 3, 2014 by

EUR/USD dropped today after the monetary policy meeting of the European Central Bank. The policy itself remained unchanged, but ECB President Mario Draghi said at the press-conference after the meeting that policy makers “do not exclude further monetary policy easing” and are ready to use other “unconventional instruments” to battle the threat of deflation. (Event A on the chart.) All in all, the tone of the speech was dovish and drove the euro down. Today’s data from the United States disappointed dollar bulls, but the ECB meeting took precedence and allowed the dollar to gain on the euro.

US trade balance posted a deficit of $42.3 billion in February, up from $39.3 billion in January. Economists have hoped for a drop to $38.3 billion. (Event A on the chart.)

Seasonally adjusted initial jobless claims edged higher from 310k to 326k last week, exceeding the expected value of 319k. (Event A on the chart.)

ISM services PMI climbed from 51.6% to 53.1% in March, but was still below the predicted figure of 53.5%. (Event B on the chart.)

EUR/USD-2014-04-03

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