FXStreet (Łódź) - Martin Schwerdtfeger, FX Strategist at TD Securities, comments on yesterday's ECB monetary policy meeting pointing out that the central bank relaxed its stance on the euro.
"Beyond announcing the extension of the inter-meeting period to six weeks from the currently monthly schedule, the publication of regular accounts of the meetings – both starting in January 2015, and the rather complicated details of the modalities for TLTROs announced in June, the meeting left little more new information."
"On the exchange rate, specifically, Mr. Draghi restated that it is not a policy target, and that 'it has become important –not any longer increasingly important –it's definitely very important for our outlook of price stability'."
"And, although he added that 'we certainly look at this with great attention', EUR's strength played a far less critical role in his address than just a few months ago."
"It seems as if EURUSD at 1.36 is much less of a concern in terms of price stability for the ECB, particularly on a day in which the US economy send the strongest signal thus far that it is poised to regain momentum after the Q1 slump."
"Perhaps the ECB is more confident now that better US data will prompt a repricing of the Fed's first hike, leading the USD to do most of the legwork to prevent EUR's appreciation and support Eurozone exports and inflation."