-Mario Draghi, ECB President
The ECB left its bazooka in the closet; however, entered the uncharted territory, widely meeting analysts' expectations. The decision to cut its key interest rate to 0.15%, the deposit rate to minus 0.1%, and marginal lending facility to 0.40% provoked a massive selloff of the shared currency. Persistently weak inflation and sluggish growth, as well as weak Eurozone lending were all risking dragging the 18-nation's bloc into an economic quagmire, leading to another recession. While decision to lower rates was highly welcomed by specialists, deposit rate in the negative territory will heat up speculations about potential risks. Economists from IHS Economics have already claimed that such a decision adds to uncertainty about how effective these actions will be. What is more important, Mr. Draghi signalled an end to the sterilization of its Securities Market Program, as well as launching a new series of targeted LTROs, totalling 400 billion euros. All these measures are expected to provide a significant boost to the economy, pushing inflation, growth and credit. Draghi's words "we will act swiftly with further monetary policy easing" can be another historically important pledge.
Immediately after the decision the single currency plunged below 1.36 major level versus the greenback, performing an impressive downside rally. The next key support is located only around 1.3483, represented by a monthly S1.
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