Euro Tried But Failed. Overview 26.07.2019

By Friday morning, the euro/dollar is returning under slight market pressure, the quotation currently being 1.1144. НYesterday the European Central Bank had a session that change literally nothing in the credit and monetary policy. All interest rates remained untouched, the main interest rate remained at zero, the deposit rate stayed stable at -0.40% per annum.

The ECB head Mario Draghi at the end of the session noted, that the perspectives of the euro/dollar growth are seriously impeded by the slow-down of the world economic development and weak international trade. These influences are stronger than the relatively positive dynamics in the employment sector and the trend for wage increasing.

РThe market had expected much more pronounced signals than it received, so the euro failed to secure at the nervous maximums. According to the ECB, the interest rates will remember at the same or lower level until the first half of the year 2020. What is more, the regulator does not exclude the new launch of the program of Quantitative Easing.

This would help smooth out the acuteness of the situation on the European credit market. However, it I obvious that right now the ECB is not ready for stimulation and prefers to wait – or, better said, let the Fed act first and see what happens.

Among the macroeconomic news today it is worth paying attention to the revision of the US GDP parameters for the 2nd quarter of 2019. In the first reading the economy has grown by 3.1%, in the second reading the index may fall to 1.8%. Such a quick slow-down of growth may be a serious stress for the dollar, but let us wait for the facts.