The top Finance Ministers and Central Bankers met today to discuss Monetary Policy. On the top agenda of the meeting the IMF has urged Draghi to take some action in regards to low inflation in the EURO Zone.

Reuters published a summary of the meeting which provided some interesting points. I've summarized them below.

  • Although the meeting included important figures such as Chair Janet Yellen & BoJ's Kuroda, the focus seemed on the ECB
  • Inflation is a big concern. Current inflation is at 0.5% while the target is to keep it close to, but below 2%
  • Recent EURO strength is considered to be contributing to low inflation
  • Draghi was urged to further Monetary easing to adjust for low inflation
  • Draghi agreed and made that committment
  • Draghi did not set specific levels at which Monetary Easing would kick in

So what does this mean for the EURO? Well it's important to know that Draghi did not have a specific level that he would further easing, but at the same time after a statement like that, where is the motivation for bulls?

If the bulls know that the ECB will implement further easing at either these levels or slightly higher, than the EURO does not look to be a good longer term investment. The statement also removes confidence of making new highs to pairs such as the EURO/USD which has been struggling to take out monthly resistance since November.

We may see a bit of a sell off in the EURO across the board on this news at the open on Sunday, possibly creating some gaps in the EURO pairs.
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