- Jane Foley, analyst at Rabobank
The European Central Bank held key rate at 1 per cent on Thursday and told it expects a gradual economic recovery this year. In the meantime, "downside risks" prevail and the outlook has become "more uncertain," said ECB President Mario Draghi.
Morgan Stanley analysts expect the ECB to cut rate by 25 basis points in June. "If the ECB delivers such a message, we expect the euro to come under increasing pressure," they said.
"Technically, easier monetary policy conditions should be currency negative," said Jane Foley, analyst at Rabobank.
"However, as has been demonstrated in recent months aggressive action from the ECB can be euro-supportive insofar as it counters risk aversion."
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