7 Jun 2013
Flash: USD sell extends post Draghi - BTMU
FXstreet.com (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ notes that the US dollar sell off extended yesterday after ECB President Draghi disappointed investors expectations.
Hardman comments that he did this by failing to clearly signal that further monetary easing is likely in the coming months, although he did reiterate that the ECB will continue to monitor incoming data very closely. He adds that the modest downgrade to the staff’s updated mid-point real GDP projection for 2013 to -0.6% was offset by a similar upward revision to the real GDP projection for 2014 to 1.1%. He writes, “With inflation still seen remaining well below target in 2014 at 1.3%, the door is still open for further easing ahead which should help to dampen further euro upside potential going forward.”
Hardman comments that he did this by failing to clearly signal that further monetary easing is likely in the coming months, although he did reiterate that the ECB will continue to monitor incoming data very closely. He adds that the modest downgrade to the staff’s updated mid-point real GDP projection for 2013 to -0.6% was offset by a similar upward revision to the real GDP projection for 2014 to 1.1%. He writes, “With inflation still seen remaining well below target in 2014 at 1.3%, the door is still open for further easing ahead which should help to dampen further euro upside potential going forward.”