This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
European Central Bank (ECB) president Mario Draghi will be speaking today, outlining his latest views on the eurozone economy. It is also interest rate decision day, but it is highly unlikely that we will see any change. Yesterday’s news that EU unemployment had fallen to 12.1% caught the markets by surprise, especially as it was expected to rise to a new high.
The markets are quieter now as we are well into the summer holidays, and dealing rooms around the city are thinner. As this is the case it would be an odd time for the ECB to come to the table with any new incentives or plans. In fact it would arguably be reckless with volumes low and volatility already higher; it is questionable how much the markets could take.
Looking at the charts, today’s drop is still well within the bullish run that the currency cross has been benefiting from. Depending on what comments we hear today, the longer term test is that of the June high 1.3418.