Euro Tanks as Draghi Disappoints

Euro is falling today as Forex traders express disappointment with the news conference from Mario Draghi. Euro had made some gains after the ECB rate cut, but those have been erased by the news that the ECB can’t do anything more for the sovereign debt crisis.

During a news conference following the announcement of the ECB rate cut, president Mario Draghi out responsibility for solving the sovereign debt crisis back on eurozone leaders. Citing the EU treaty, which doesn’t allow “monetary financing,” Draghi said that the ECB couldn’t increase its bond buying program.
Instead, he said that European leaders will have to come up with a way to stem the sovereign debt crisis. He did say that there are some non-standard measures that the ECB can take to help with liquidity, but that financing questions had to be answered by EU leaders at their summit today and tomorrow.
The news has sent risk appetite lower, and the euro is losing ground against its counterparts, especially the US dollar. The combination of demand for dollars in Europe, as well as better jobs market news in the United States, is giving the greenback a boost.
At 15:35 GMT, EUR/USD is lower at 1.3317, down from the open at 1.3415. EUR/GBP is lower at 0.8517, down from the open at 0.8540. EUR/JPY is down to 103.2600 from the open at 104.1855.

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