New York

36912

London

36912

Tokyo

36912

USD, GBP steady after ECB rate cut

13 Sep 2019

With the European Central Bank’s announcement of the rate cut and new Quantitative Easing, the EUR/USD is being traded over the 1.1050 handle. In addition, the Euro added in value as investors hope for a trade war interim deal to improve the markets. The pair found resistance to reach the 1.1085-90. The ECB cut deposit rates by 10bps to -0.50% and restored an open-ended long-term government bonds purchase program, at €20 billion a month from November onwards. 

Furthermore, ECB President Mario Draghi emphasised that downside risks to the Euro-zone economic outlook continue, together with a downward revision of the GDP/inflation projections, when speaking at the post-meeting press conference. The economy is expended to expand by 1.1% this year and 1.2% the following year. The EUR/USD reached a two-week high at 1.1087 and ended with gains. 

As the Democratic Unionist Party (DUP) denied allegations that it would accept special treatment to solve the backstop, the GBP/USD pair remained to be traded on a high level. Moreover, it is expected that the UK’s request to extend the Brexit deadline would be approved, pushing the Cable at trade value 1.2350. 

The USD/JPY has slowed down and eased off its 6-week highs at 108.26 even though trade war talks are expected to resume. The pair dropped to 107.52 overnight following the ECB’s announcement but quickly recovered after improved risk sentiment.