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10 Feb 2014
Flash: ECB remains a key driver for EUR/USD - BTMU
FXStreet (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ, points to the next ECB meeting in March as the main catalyst for the EUR/USD.
Key Quotes
"The euro remains on a firmer footer following last week’s disappointing ECB monetary policy meeting at which it failed to meet market expectations for further monetary easing and/or an easing of liquidity conditions in the Eurosystem. Euro upside risks have increased in the near-term although further upside should prove only modest given that expectations for ECB policy action are shifting to their next meeting on the 6th March."
"The announcement on Friday that the German Constitutional Court has referred a case questioning the legality of the ECB’s OMT programme to the European Court of Justice resulted in only a temporary decline for the euro. The German Constitutional Court saw substantial reasons to suggest that the OMT programme exceeds the ECB’s mandate and infringes on the ban on funding member states."
"Investors remain comfortable with their view that the ECJ ruling is unlikely to significantly alter the OMT programme. Any impact upon the euro in the near-term should prove limited with the safety net provided by the OMT currently not required as investor confidence in euro-zone sovereign bonds has since significantly improved. However, any decision which reduces the effectiveness of the OMT programme in the future may leave the euro-zone more vulnerable to shocks."
Key Quotes
"The euro remains on a firmer footer following last week’s disappointing ECB monetary policy meeting at which it failed to meet market expectations for further monetary easing and/or an easing of liquidity conditions in the Eurosystem. Euro upside risks have increased in the near-term although further upside should prove only modest given that expectations for ECB policy action are shifting to their next meeting on the 6th March."
"The announcement on Friday that the German Constitutional Court has referred a case questioning the legality of the ECB’s OMT programme to the European Court of Justice resulted in only a temporary decline for the euro. The German Constitutional Court saw substantial reasons to suggest that the OMT programme exceeds the ECB’s mandate and infringes on the ban on funding member states."
"Investors remain comfortable with their view that the ECJ ruling is unlikely to significantly alter the OMT programme. Any impact upon the euro in the near-term should prove limited with the safety net provided by the OMT currently not required as investor confidence in euro-zone sovereign bonds has since significantly improved. However, any decision which reduces the effectiveness of the OMT programme in the future may leave the euro-zone more vulnerable to shocks."