Today’s trading session was very volatile for the Forex market due to the monetary policy meeting of the European Central Bank. The euro sank immediately after the gathering but bounced afterwards.
Most market participants were expecting additional stimulus from the ECB and the central bank did not disappoint. It reduced all its interest rates, including the key rate which has been cut to zero — a huge surprise to the market. Additionally, the ECB expanded its asset-purchase program.
It looked like the euro should sink after the announcement, considering all the actions by the central bank. And indeed, the currency had slid initially. Yet everything has changed after ECB President Mario Draghi signaled during the press-conference that he expects no further rate cuts. Such comments resulted in a huge jump of the euro.
EUR/USD was down from 1.0998 to 1.0844 intraday but rebounded and traded as high as 1.1194 (rallying 1.8%) as of 17:40 GMT today. EUR/JPY climbed 1.3% from 124.64 to 126.26 after falling to 123.69 initially. EUR/GBP surged 1.2% from 0.7735 to 0.7825, bouncing from the daily low of 0.7661.
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