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EUR: ECB Easing But Interest Rate Floored
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§ ECB eased monetary policy (10 Mar) cutting main refi,
marginal lending facility and deposit rate while expanded monthly purchases,
technical tweaks to APP and introduced TLTRO II.
§ ECB President Draghi’s hint of interest rate “floor” could
pose risks of Europe-UST yield spread narrowing and upside risk to EURUSD.
§ Key resistance for the EURUSD at 1.15; only a decisive
break above could see further upside gathering momentum possibly towards 1.18
levels. Otherwise EUR may continue to consolidate in the recently established
range of 1.08 – 1.15.
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