EUR/USD down 0.57%. European shares climbed on ECB announcement.

The ECB (European Central Bank) left interest rates unchanged as expected. Mario Draghi, the president of ECB, announced today that enormous fall in oil and stocks prices this month had compounded the risks to the euro zone economy and that it would “review” its already record low interest rates and 1.5 trillion euro money printing program at its March meeting. According to Draghi, in this volatile market environment, euro area inflation dynamics also continue to be weaker than expected. The ECB’s economists had expected the inflation rate to pick up from the 0.2% recorded in December and average 1% this year, rising further in 2017. But Mr. Draghi said oil prices are now 40% lower than when those forecasts were made, and it is now possible that broader consumer prices will start to fall again over coming months.

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“It will therefore be necessary to review and possibly reconsider our monetary policy stance at our next meeting in early March when the new staff macroeconomic projections become available,” said Draghi.

After Draghi’s announcement EUR/USD fall below 1.08$ hitting the daily low of 1.0781. It closed the European session at 1.0829, down 0.57% from the previous close.

European markets reacted to the ECB announcement positively. All major indices were up today, as presented below:

  • FSTE 100 closed at 5,773.79, up 1.77%.
  • CAC 40 increased 1.97% closing at 4,206.4.
  • Euro Stoxx 50 was up 2.13% as of 5:50 PM CET.

Oil prices rose either during European session. As of 11:35 ET the WTI crude oil was trading at 29.34$ up 3.49% and Brent crude at 28.93$, representing 3.77%.

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I’m a finance specialist with 4+ years of working experience, out of which 2 years as a SME relationship manager at Byblos Bank and 2 years as a Finance Director in a Food & Beverage sector. My academic background include BA in economics, MA in finance, CFA Level 1 and F1, F2, F3 level of ACCA. I’m also experienced in Forex/CFD trading and Forex/ Equity markets analysis.

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