Mario Draghi did his best to talk down the euro, complaining about the exchange rate. This did not succeed, to say the least. What’s next? Here are three opinions:
Here is their view, courtesy of eFXnews:
EUR/USD: Market Won’t ‘Overdo’ EUR Rise Post-ECB; Where To Target? – NAB
NAB Research comments on today’s ECB September policy decision.
“The ECB decided to hold off making its big announcement on the next steps for its asset purchase program today, but in keeping with its July pledge to make the decision ‘in the autumn’, President Draghi made it clear the 26 October meeting would be when the Governing Council would be ready to make the bulk of its decisions for 2018
…Going in to today we had long been of the view the ECB would announce a taper intent today with specifics in December, though clearly the combination of recent media stories of delay and Draghi’s July ‘autumn/fall’ pledge meant the 26 October meeting was also live. To get tied up on either month misses the point. What matters is there is every indication that baring something unexpected the ECB will provide taper details next month (even if it leaves some uncertainties until December) and that’s helping keep the EUR bid.
Notwithstanding independent USD weakness we don’t think markets will overdo the EUR’s rise. Eventually the message that gains can and will impact the ECB will hit home. Our end September forecast of 1.19 remains,” NAB argues.
EUR: Dip-Buying Demand To Remain Strong Into ECB October Meeting – Nomura
Nomura FX Strategy Research argues that the balance of risks points to an extension in EUR appreciation trend into the October meeting.
“There are a couple of potentially dovish elements (mention of FX volatility in the introductory statement, 2019 inflation forecast downgrade, and no commitment on an October announcement), but the market has likely already priced them, as they were mostly leaked before the meeting.
