Euro was hold around the level of 1.1770 to the US dollat in a Friday trading yesterday. The single currency is also consolidated versus the Yen and Pound. What is the cause? 

The cause was the European central bank or the ECB meeting announcement result stated yesterday. It was fail to become a bullish or bearish catalyst which is quite significant.

The change in the form of the clue which is given about the policy direction in the future is quite minimum. ECB maintains the 0% interest rate and 0.25% on the marginal loans. 

The deposit rate is about -0.50%. Besides that, the central Bank doesn’t change their quantitative easing scale until know. The decision is taken based on some considerations. 

Some Important Programs are Continued

The Pandemic Emergency Purchase Programme with the value of EUR 1.85 trillion will be continued. That is done with the pressure speed which has been used so far. 

Meanwhile, the Asset Purchase Programme is also done with the speed of EUR 20 billion per month. In the same occasion, the central bank said about their desire to maintain the low interest rate. 

That maybe maintain for a long – term period. It is not a huge surprise because the inflation target change happened lately. That was from ‘under but close to 2%” to become “symmetric to 2%”.

It has been signing that ECB doesn’t want to increase their interest rate up to several years in the future. The inflation speed is still not that strong and the pandemic is still so risky. 

The European Recovery is on the Track

The economy recovery in the euro area is on its track. So many people have been vaccinated and the lockdown restrictions have been loosened in most of the areas in that continent. 

However, it cannot be denied that psndemic is still shadowing. That was stated by the President of ECB, christine Lagarde. She gave the next opinion about the situation happened. 

Lagarde think that the risk for the global economy outlook is balanced. That can be up or down. The EUR/USD has been up and down around 1.18 ahead the Lagarde’s conference press. 

Howeber, then it was closed in a weaker position at the end of the New York session. Most analysts think that the announcement this time will weight on the Euro exchange amidst the fluctuative global sentiment. 

The ECB Position is Stronger

The meeting makes the ECB position is stronger as one of the most dovish central bank which directs to the EUR weakening to the currencies with high beta. It is for certain conditions. 

The example is when the global risk sentiment is recovered and the dovish position must become an additional help for a wider sentiment. That is stated by Ruined Ding from the CitiFx wire. 

In their sight, the implication from the new ECB guide is consistent with the accommodative policy period. That is longer than the present time and it has been measured by the financial market. 

However, several analysts think that Euro still has a chance to wake up for a while in a short – term period. The reason is because the ECB statement is not that  in the market. 

The Lack of Policy Movement in the Future

The statement is not as dovish as what people’s are expected. The lack of the clues, especially about the policy movemeny in the future is a kind of a moderate dissapointment.

That was felt by those who are expecting for a stronger dovish signal. In fact, that expectation seems quite hard to happen because of several moments and situations happened in the market. 

That was stated by the TD securities who predicted that the EUR / USD to increase. That pair may has a chance to rise up to the level of 1.1851 in an closer time.