Tag: ECB

Wow Massive Forex Swings

Mario Draghi

By now, you probably already know that the ECB cut their interest rates from 0.15% to 0.05%

Two weeks ago, Draghi signaled that he was ready to act again, and yet, no one expected the ECB to act so quickly…

But here we are, they reduced their interest rates by 10 basis points to spur economic growth and reduce the risk of deflation…

Was it a good measure?

Only time will tell… but if you want to hear my opinion, Draghi knows his stuff, so its probably the way to go.

Now, did you see the impact in the market?

We saw massive forex swings on most currency pairs and crosses!

ECB, forex, interest rate cut

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Draghi’s speech and what it means to you

Draghi’s speech yesterday was definitely good for the markets, especially for the Forex market.

In short, Draghi said that the ECB is prepared to buy unlimited (what???) amount of bonds of countries that request a European bailout and fulfill strict policy condition (even when Germany’s Bundesbank publicly criticized the decision).

First. I think this is good for the forex market as traders and investors will have more confidence about the Euro zone and they’ll start making their trading and investing decision and this will keep the markets moving (not as we’ve seen them in the last weeks).

Second,

Draghi, ECB

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I guess I’ll have a long weekend

Want to know why I’m taking a long weekend?

  1. Earlier today the ECB announced a rate cut to 1% from 1.25%.  Did you see the impact on the market on the rate cut? It was descent, and we’ll probably see more volatility because of this.
  2. European Summit. The next following days are extremely important for the European crisis, plenty of decisions need to be taken, and by judging today’s impact of the ECB rate cut, we’ll see more wild moves today and tomorrow.

So let me suggest you, just take the rest of the week off, I’m going to do it.

Are you doing to trade the rest of the week? Let me know.

Please have a great weekend!

Good luck!

Raul Lopez
Forex Training

ECB, european summit, interest rate