The European Central Bank kept its main policy rates on hold today as was widely expected, while likewise making no changes to their QE program. There was little need to, after all, with the taper starting next month, when the pace of asset purchases will decline from €80 billion per month down to €60 billion per month. Yet the rate hold did little to move markets; it was what ECB President Mario Draghi said at his press conference that drove the Euro higher across the board.

While promising “if [the] outlook becomes less favorable, we stand ready to increase our asset purchase program in terms of size and/or duration,” a comment that is typically viewed as dovish, it was the sum of his commentary otherwise that proved market-moving. President Draghi announced that the ECB upgraded its inflation forecasts for 2017 (+1.8% from +1.3% in December) and 2018 (+1.7% from +1.6% in December), and it increased its GDP forecasts for 2017 (+1.8% from +1.7% in December) and 2018 (+1.7% from +1.6% in December). Summarizing these forecasts, President Draghi said that “risks of deflation have largely disappeared,” and that “the balance of risk regarding growth has improved.”

To underscore how confident the ECB’s Governing Council are on the improvement in conditions in the Euro-Zone, they decided not to extend another TLTRO (targeted longer-term refinancing operation), noting that “no member of the Governing Council felt the need to discuss a new TLTRO.” Backing away from such an extraordinary policy tool is a sign that the ECB feels the worst of the Euro-Zone debt crisis is in the rearview mirror.

Chart 1: EUR/USD 1-minute Chart (March 8, 2017 Intraday)

Amid the commentary, the Euro was able to rally broadly against its major counterparts. While EUR/USD rallied from the mid-1.0500s to above 1.0600 briefly, EUR/JPY was able to trade to its highest level in five-weeks. Likewise, EUR/GBP traded to a fresh daily high, hitting its highest level since January 17. At the time this report was written, EUR/USD was trading at 1.0592, EUR/JPY was trading at 121.54, and EUR/GBP was trading at 0.8691.