EURUSD Extends on Losses After ECB Draghi’s Cautious Comments

EURUSD Analysis and Talking Points

EURUSD Dips on Cautious Draghi
Current Accounts Sees Significant Fall

See our Q2 FX forecast to learn what will drive the Euro through the quarter

Eurozone Current Accounts Falls Significantly

A muted reaction seen in EUR/USD and the DAX after the Eurozone’s current account for April fell to EUR 28.4bln from EUR 32.0bln a year earlier. This was due to the EUR 21bln surplus in goods and EUR 9.6bln in services, while the NSA adjusted reason fell to EUR 26.2bln from 40.6bln.

President Draghi Cautious on Outlook

Following last week’s surprise announcement by the ECB, attention had been placed on today’s comments from President Draghi. In the speech, the ECB President stated that inflation and growth had been returning to objective, while also stating that the central bank will be patient in determining timing of first rate hike. Reminder, the ECB noted that rates will remain low until at least summer 2019, implying that the first “live” meeting would be September 2019. Additionally, the President highlighted that uncertainty surrounding the growth outlook had recently increased amid the escalation of trade wars, as such risks to growth are tilted to the downside.

Following these relatively cautious remarks from President Draghi, EURUSD has slipped through 1.16 and is now back towards the mid-1.15. Eyes now on the June low at 1.1510, whereby a break could see a run in for 1.1448.

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EURUSD PRICE CHART: DAILY TIME FRAME (December 2016-June2018)