-Mario Draghi, ECB President
No surprises. Again… The European central bank left all three rates unchanged this month, completely in line with analysts' expectations. Investors focused on the ECB press conference, as despite a lack of actions policymakers were expected to shed light on future moves as well as try to talk down the Euro by any means, as EUR/USD around 1.40-mark is a serious threat to the 18-nation bloc's economy, which still struggles to grow.
During the press conference, the president claimed that officials are ready to act in June and also stepped up his expressions of concern about the strength of domestic currency. Policymakers are assessing the current state of the economy and trying to predict the amount of stimulus they might need to inject to the economy, which is haunted by the threat of deflation. Even though, Draghi gave no clear answer about the tool the central bank will use, the revised economic forecasts next month can provide additional room for a manoeuvre to cut interest rates or implement the U.S.-style quantitative easing. Analysts now give around 50% possibility the ECB will slash the main refinancing rate and the deposit rate in June.
Following dovish comments, the single currency plunged to a 2 1/2-year high against the greenback, and posted loses versus all but two major currencies.
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