Door for Euro strength has been unlocked by ECB is a post from: Forex News
The Euro’s resiliency continued to shine this week as a session of mixed economic data took a backseat to the European Central Bank’s policy meeting on Thursday. On a chilling of tensions in Eastern Europe and seemingly diminished outcome of military conflict, the higher yielding currencies led the pack as risk appetite surged: the EURAUD depreciated by -1.08% and the EURNZD eased by -0.38%. The Euro’s strength came through within the last two days of the week, and its gains elsewhere are constructive going forward.
While the ECB’s meeting on Thursday helped the Euro realize it’s pent up bullish potential, it might have just paved just how for further gains over the coming months. As ECB President Mario Draghi made clear in the press conference on Thursday, the ECB doesn’t desire to merely inject more liquidity to the Euro-Zone banking system; there is little need right now. Interbank lending rates are stable below the ECB’s overnight reference rate of 0.25%, which means funding stresses are low. Sovereign yields are stable at multi-year lows and equity markets are buoyed; the linkages between the Euro-Zone banking system and her sovereigns are now being strained.