- ECB kept monetary policy unchanged.
- The euro fell to daily lows after the statement.
- In minutes, Lagarde’s conference begins.
The euro fell along the market after the meeting of the Governing Council of the European Central Bank (ECB). The absence of a stronger message to deal with the rise in inflation played against the common currency.
The ECB, as expected, maintained the reference interest rates and reaffirmed that the purchase program (APP) will end in the third quarter. The message was similar to that of the previous meeting. Regarding the rates, these do not point to rise until after the APP is completed.
The EUR/USD fell from 1.0910 to 1.0865, while the EUR/GBP hit weekly lows below 0.8300. The EUR/JPY marked daily lows at 136.11. The Swiss franc it also fell across the market after the ECB decision.
Analysts at TD Securities say the ECB was not supportive of the euro, “especially as other central banks seem quite reactive in fighting inflation.” The divergence with other central banks will continue to be a negative factor. They see EUR/USD as likely to remain on the defensive for most of the second quarter.
At 12:30 GMT, Christine Lagarde will give a press conference where she will explain the ECB’s decisions and answer questions. Volatility in euro crosses is expected to continue.
Source: Fx Street
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