No ECB action today but Draghi's press conference could be entertaining - FXStreet

By FXstreet.com | August 07, 2014 AAA

FXStreet (Łódź) - Pablo Piovano, Economist and Lead European Editor at FXStreet believes that the ECB will remain on hold today, but that Draghi's press conference following the interest rate announcement might bring some details on the central bank's further moves.

Key quotes

"Recent mixed results from the euro area main economic indicators coupled with maybe an unusual silence from the central bank’s officials might prompt investors to think that the tone in this meeting could well be a repetition of the last ones."

"Indeed, it needs time – as well asserted by President Draghi – to measure the effectiveness (if any) of the recent announcements, and after a couple of months, it sounds yet a bit premature to adventure any results."

"As per usual, the door remains of course open for further easing measures should the ECB and the situation in the euro bloc demand so."

"However, market chatter of a QE-like program has been dying off as of late, relegating this option to a later stage, where fundamentals in the region deteriorate further and/or the TLTRO results are deemed an utter failure."

"The latest results from the CPI in the euro area (0.4% YoY) will surely give President Draghi enough ammunition to keep the attendees at the press conference entertained today, reinforcing at the same time the case for a dovish rhetoric, as widely expected by the FX community."

"So, given this probable scenario, a test of the 2014 lows around 1.3340 should not be ruled out, and neither a challenge of the critical 1.3300 mark."

"On the (less likely) flip side, any upside surprises should be capped by recent highs near the mid-1.3400s."

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