ECB Rate Decision Gives No Boost to the Euro

Market Reviews

US dollar slightly strengthened today. US initial jobless claims rose 9k to 217k in the week ended July 21, below expectation of 221k. The four-week moving average of initial claims dropped -2.75k to 218k. Continuing claims dropped -8k to 1.745m. The four-week moving average of continuing claims rose 9.5k to 1.74575m.

Headline durable goods orders rose 1.0% in June, well below expectation of 2.5%. Ex-transport orders rose 0.4%, above expectation of 0.3%. Wholesale inventories rose 0.0% mom versus expectation of 0.3% mom. Dollar is relatively unmoved after the releases. Also from US, trade deficit widened to USD -68.3B in June versus expectation of USD -67.0B.

Euro remains weak after ECB’s meeting results. As expected, the European Central Bank left interest rates without changes. The ECB's interest rate on its main refinancing operations, its marginal lending facility and the deposit facility will remain unchanged at zero, 0.25% and -0.40%, respectively. The ECB also repeated that it expects its asset purchase program to end in December after halving to €15 billion per month from September 2018, from €30 billion at present.

Mario Draghi (ECB President) said, that the latest stabilization in economic data is in line with forecasts and points to ongoing growth. Risk to growth outlook remains broadly balanced despite prominent threat of protectionism. Meanwhile, underlying inflation remains muted for now but is expected to rise gradually in medium term.