ECB Decision Alerts Euro Sellers to No Surprise

Dovish Draghi lived up to his moniker, as the planned stimulus is aimed at boosting a struggling economy. Even though the 4Q GDP data, released just hours earlier, offered a faint sliver of hope for the Euro bulls, the data wasn’t enough to stop the ECB from issuing its third wave of its Targeted Longer-Term Refinancing Operations (think: cheap loans to banks), with the current round set to start expiring by the middle of next year.

The drop in the Euro would have been more pronounced, if it wasn’t for the fact that EURUSD has declined every session so far this month; markets have already pricing in the dovish move by the central bank in the leadup to today’s decision.

Investors worldwide will now be keenly watching ECB President Mario Draghi’s press conference at 2:30PM Frankfurt time. Today’s ECB commentary may challenge Euro bulls, should the outlook for the Eurozone turn sour.

Will the growth and inflation forecasts be downgraded for a second time this year? Will the TLTROs be enough to mitigate those downside risks? Stay tuned to find out.