11.03.2016 - We maintain a negative outlook for the euro
Yesterday the price of the euro showed a strong price movement after the press conference of the ECB’s President Mario Draghi and publication of the decisions on the ECB on interest rates. Thus, interest rates on deposits was reduced to -0.40% vs. -0.30% previously, the refinancing rate decreased by 0.05% to 0.00%, the monthly volume of assets purchasing program was increased by 20 billion euro to 80 billion euro. At the same time, forecasts of GDP growth in the euro area have been worsened to 1.4% in 2016 versus 1.7% previously, according to the regulator and inflation expectations will be only 0.1% against the previous estimate of 1.0%. Further movement of the euro will depend on the rhetoric of the Fed next week. We maintain our medium-term negative outlook and forecast a drop in prices in the near future to the level of 1.0800.