Market Snapshot – ECB Leaves Rates Unchanged and so does the BOE

ECB Holds Rates

The focus for today was clearly on the euro as the ECB came up with its rate announcement followed by the customary press conference that was addressed by the ECB President Draghi. As expected, the rates were kept unchanged while the ECB also confirmed the continuation of QE till the end of September 2018. This was viewed as dovish by the markets but the fact that the ECB raised the forecasts for growth and inflation led to balance of both the sides and this helped to keep the fall of the euro under control. So far, the euro has managed to stay just above 1.18 as of this writing and it appears as through the euro would  go into the year end holidays within the range that has been seen in the pair over the past few months. This would also mean a lot of consolidation and ranging in this pair over the next couple of weeks.

Central Banks Follow Scripts

So after the round of central bank announcements, there have been no surprises from any of the major central banks with the Fed hiking rates and the ECB and the BOE keeping the rates on hold. This was what the market was expecting and was also pricing in all this while and that is the reason why we are seeing very little impact in the markets from these set of events. We now head into the last 2 weeks of the year with most of the pairs largely within their ranges.