{"id":93265,"date":"2016-07-21T06:45:53","date_gmt":"2016-07-21T10:45:53","guid":{"rendered":"http:\/\/countingpips.com\/?p=93265"},"modified":"2016-07-21T06:45:53","modified_gmt":"2016-07-21T10:45:53","slug":"ecb-to-remain-on-hold-draghis-words-what-matter-the-most","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2016\/07\/ecb-to-remain-on-hold-draghis-words-what-matter-the-most\/","title":{"rendered":"ECB to remain on hold, Draghi\u2019s words what matter the most"},"content":{"rendered":"
July 21, 2016<\/div>
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Article by ForexTime<\/a><\/p>\n

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After years of extraordinary monetary policy measures, the ECB is again under pressure to take more actions as the central bank meet for the first time post-Brexit vote. Although Brexit remains the biggest risk threatening Eurozone\u2019s recovery, there are more challenges to be addressed when the central bank meets later today, such as the troubled Italian banks and the plunging yields on governments\u2019 debt which makes it difficult for the ECB to pursue its \u20ac80 billion monthly debt purchases without amending the terms of their program.<\/p>\n

Most developed economies central banks\u2019 signaled more easing to come this summer, but with no fresh update on the status of the economy and only four months since the ECB implemented new measures by cutting rates 10 basis points and increasing their monthly QE purchased by \u20ac20 billion, I do not expect any new major actions to be taken at this meeting.<\/p>\n

Mr. Draghi\u2019s only tool is likely to be his dovish words in opening the door for further easing if economic conditions deteriorated, however, this might not be enough to send the Euro lower unless he provides clear guidance to markets on what the central bank could do in September when they release new economic forecasts. If he disappoints EURUSD could climb towards 1.12.<\/p>\n

News that Japans government is planning a \u00a520 trillion package, twice what had been previously anticipated sent the Yen towards its lowest level since June 10. USDJPY has rallied 700 pips in 9 trading days to trade above 107, and seems there\u2019s more upside potential if BoJ decided to support from the monetary side when they meet in July 28. Risk appetite and higher yields on U.S. treasury bonds also supported the rally, but if correction is due in U.S. stocks after several record highs than the upside is likely to be limited on the short run.<\/p>\n

Sterling extended its yesterday\u2019s gains as unemployment rate dropped to lowest levels in more than a decade and BoE\u2019s survey showed no clear evidence of a slowing economic activity from the country’s decision to leave the EU. This outlook is likely to be changed when Markit releases the one-off release of flash purchasing managers index on Friday. It will be the first leading indicator to provide a valuable assessment on the immediate impact post-referendum vote. On the data front today, U.K. retails sales is expected to drop -0.6% in June from 0.9% in May, a steeper decline would likely erase today\u2019s gains.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

Disclaimer: <\/strong>The content in this article comprises personal opinions and should not be construed as containing personal and\/or other investment advice and\/or an offer of and\/or solicitation for any transactions in financial instruments and\/or a guarantee and\/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.<\/em><\/p>\n

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\"Forex-Time-Logo\"Article by ForexTime<\/a><\/span><\/strong><\/p>\n

ForexTime Ltd (FXTM)<\/strong> is an award winning international online forex broker regulated by CySEC 185\/12 www.forextime.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Article by ForexTime After years of extraordinary monetary policy measures, the ECB is again under pressure to take more actions as the central bank meet for the first time post-Brexit vote. Although Brexit remains the biggest risk threatening Eurozone\u2019s recovery, there are more challenges to be addressed when the central bank meets later today, such […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-93265","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/93265","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=93265"}],"version-history":[{"count":3,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/93265\/revisions"}],"predecessor-version":[{"id":93284,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/93265\/revisions\/93284"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=93265"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=93265"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=93265"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}