EUR Falls After Dovish European Central Bank Rhetoric
The euro fell sharply after the European Central Bank (ECB) outlined its exit from quantitative easing (QE), but also claimed interest rates won’t likely budge for more than a year.
Sitting at around 1.1818 versus the dollar before the announcement, the euro fell to 1.1681 during Draghi’s subsequent press conference, shipping around 0.9 percent in value for the session.
The move was accelerated after data showed that U.S. retail sales surged in May, causing more buying of the dollar against a number of currencies.
The ECB has said that from September the pace of bond buying will fall from 30 billion euros ($34 billion) to 15 billion euros. The figure then falls to zero in December 2018.
Euro investors appeared to focus more on the statement from the bank’s governing council that key ECB rates are to remain at their present levels “at least through the summer of 2019”.
Interest rate on the main refinancing operations, marginal lending facility, and the deposit facility were unchanged today at 0.00 percent, 0.25 percent and -0.40 percent respectively.