The European Central Bank left its benchmark interest rates unchanged on Thursday, holding on to 1.0 percent . This was in line with expectations and the euro hardly reacted after the announcement.
EURUSD nudged up only slightly to 1.2771 from 1.2762 within a couple of minutes from the announcement at 12:45.
In the past two policy meeting the central bank cut rates and introduced easing measures, but decided to take a pause this time as recent measures appear to have helped somewhat restore calm in the markets despite further signs of weakness in the euro-zone economy.
The focus now immediately turns to the ECB press conference at 13:30 GMT. Investors will pay attention to the language used to see any hints in certain key words that could signal future policy easing, comments on Greece, Italy and the central bank’s bond buys. ECB President Mario Draghi is not expected to announce further unconventional measures this time but there is growing speculation that the central bank might change policy by March, depending on the economic situation in the euro zone.
Some economic data have been less grim in recent weeks and European leaders have made progress, although “slow”, toward coming to grips with the region’s debt crisis.
Earlier in the day, Spain’s government sold almost €10 billion ($12.71 billion) at its first government bond auction in 2012, twice the upper end of its indicative target range , helping ease Spanish bond yields.