The Euro rebounded from a two-month low against the dollar on Thursday as investors bought the euro after the ECB failed to cut interest rates as expected and President Draghi expressed optimism about the eurozone economy.
Before Thursday's ECB meeting, investors digested more than 50% interest rate cuts. The Euro rebounded from a low level after the European Central Bank announced that interest rates would remain unchanged.
In a statement, the European Central Bank said interest rates would remain at "current or lower levels". The outlook for the euro is still not optimistic, as the ECB may further relax monetary policy in the future.
"I think the market's expectations before the ECB meeting are quite dovish, and some people in the market have already digested the expectations of interest rate cuts," said Mazen Issa, senior foreign exchange strategist at Dominican Securities, adding that the final announcement is a signal to replenish Euro short positions.
"Now the question is: how many pigeons will Draghi have at his press conference? Although he's quite a pigeon, there are some positive factors, "Issa said.
At a news conference, Draghi said he believed the risk of a recession in the eurozone was low, but pointed out that recovery was unlikely in the second half of the year.
In a research report, Rabobank said Draghi failed to meet market expectations, giving more specific information on whether to launch a new asset purchase plan. Draghi said policy tools had not yet been discussed.
"This indicates that, although today's action may be supported by broad consensus, the fact that discussions on specific easing schemes to be implemented in September may reveal that there are still differences within the Management Committee. Obviously, there is no consensus yet, "said the Dutch Cooperative Bank.
In afternoon trading, EUR = rose 0.1% to $1.1146. Earlier, the euro fell to a two-month low of $1.1102 against the dollar following the release of the weak German Ifo Business Confidence Survey in July.
Hot Model No.: