ECB Avoids Interest Rate Cut, EUR/USD Shows Solid Rally

EUR/USD rallied today after the European Central Bank refrained from cutting interest rates. (Event A on the chart.) President Mario Draghi was not particularly dovish at the press-conference that followed the policy announcement, calming fears and returning appeal to the European currency. (Event B on the chart.) Meanwhile, the US trade balance was disappointing, while unemployment claims surprised positively.
US trade balance posted a deficit of $38.7 billion in December, up from $34.6 billion in November. The actual value exceeded analysts’ expectations of $35.8 billion. (Event B on the chart.)
Initial jobless claims dropped from 351k to 331k last week. Specialists have expected somewhat smaller drop to 337k. (Event B on the chart.)
Nonfarm productivity increased at the 3.2% annual rate during the fourth quarter of 2013, compared to analysts’ estimates of 2.8% and the previous quarter’s growth by 3.0%. (Event B on the chart.)


If you have any comments on the recent EUR/USD action, please reply using the form below.