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15 May 2014
Markets started to price in further easing by the ECB – Danske Bank
FXStreet (Edinburgh) - In the view of Analyst Jens Pedersen at Danske Bank, the EUR would remain under pressure as rumours of easing measures by the ECB continues to build up.
Key Quotes
“Bundesbank President Jens Weidmann hinted that the Bundesbank is ready to act if needed, while noting that the risk of deflation in the euro area is relatively slight. The rather balanced comment from the ECB member had no effect on the current market expectation of further ECB easing in June”.
“Current prices indicate that the market expects more than ‘just’ a rate cut from the ECB, indicating that the bank has to deliver in order for the euro to weaken markedly further”.
“Today’s euro-zone GDP and the US inflation data might not have a major impact on EUR/USD as the market mainly trades on what the ECB might do at its rate-setting meeting in June”.
“That said, if the Q1 GDP figure from the euro area comes out weaker than expected, it certainly supports the case for more ECB easing and thus might push EUR/USD down further”.
Key Quotes
“Bundesbank President Jens Weidmann hinted that the Bundesbank is ready to act if needed, while noting that the risk of deflation in the euro area is relatively slight. The rather balanced comment from the ECB member had no effect on the current market expectation of further ECB easing in June”.
“Current prices indicate that the market expects more than ‘just’ a rate cut from the ECB, indicating that the bank has to deliver in order for the euro to weaken markedly further”.
“Today’s euro-zone GDP and the US inflation data might not have a major impact on EUR/USD as the market mainly trades on what the ECB might do at its rate-setting meeting in June”.
“That said, if the Q1 GDP figure from the euro area comes out weaker than expected, it certainly supports the case for more ECB easing and thus might push EUR/USD down further”.