New York






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.