The euro rallied against the dollar after the European Central Bank press conference. The single currency had dropped sharply during ECB President Mario Draghi’s speech, but as the conference got underway, the euro took back much of its losses.
Euro fell early into the conference when Draghi mentioned the outlook for the euro zone is subject to downside risks but he added that inflation was likely to remain above 2 percent this year. Many interpreted this as less likelihood of further monetary easing. This helped euro bounce.
“Overall, Draghi was less dovish than expected. We were waiting for easing signals and we’re not getting any of that and that has kept a bid in the euro,” said Greg Moore, currency strategist at TD Securities in Toronto.
Draghi said he has “full confidence” in Spain. He also believes the euro zone is more stable.
“Available indicators for the first quarter remain consistent with a stabilisation, with economic activity at low levels.”
“There are indications that global recovery is proceeding … We continue to expect the euro area economy to recover gradually during the course of the year.”
EURUSD bounced from 1.3094 to 1.3179. The euro also rose against the yen to 106.10 yen .