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8 Mar 2013
Forex Flash: EUR/USD bounced sharply as Draghi doused easing expectations - OCBC Bank
Emmanuel Ng of OCBC Bank notes that EUR/USD bounced sharply on Thursday after the ECB´s Draghi doused prior expectations of an increasingly dovish central bank by noting that “inflation expectations remain firmly anchored.”
He adds that coupled with a positive Spanish debt auction, EUR/USD bounced back above 1.3100 with the common currency also carving out gains against its G10 counterparts. Elsewhere, he sees that GBP/USD also experienced some relief after the BoE left its QE program untouched, but the pair eventually retraced from its intra-day highs above 1.5050 to end slightly higher on the day. Earlier in the day, Ng notes that the BoJ, like the ECB and the BoE, left monetary conditions untouched but with the outlook for the EUR and the GBP disrupted, investors took the path of least resistance and reverted to selling the yen across the board with the USD/JPY probing the 95.00 area this morning.
He adds that coupled with a positive Spanish debt auction, EUR/USD bounced back above 1.3100 with the common currency also carving out gains against its G10 counterparts. Elsewhere, he sees that GBP/USD also experienced some relief after the BoE left its QE program untouched, but the pair eventually retraced from its intra-day highs above 1.5050 to end slightly higher on the day. Earlier in the day, Ng notes that the BoJ, like the ECB and the BoE, left monetary conditions untouched but with the outlook for the EUR and the GBP disrupted, investors took the path of least resistance and reverted to selling the yen across the board with the USD/JPY probing the 95.00 area this morning.