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Currency Market Analysis

Jul 26, 2019 | Currency Market Analysis

Global Themes

Shares fall, USD, JPY gain, as ECB disappoints

Most leading financial markets – weakened overnight after the highly anticipated European Central Bank meeting saw the ECB decline to cut interest rates.

Financial markets had seen the decision as a 50-50 chance but, while the ECB president Mario Draghi noted that further monetary stimulus was required, the ECB kept its key rate at -0.4%.

The ECB announcement suggests that a cut – or alternative policies – might be seen at its September meeting.

Risk sentiment

The ECB’s news disappointed investors with US and European equity markets lower overnight.

The safe haven currencies performed best with the US dollar and Japanese yen both climbing.

The AUD also fell with the currency down 0.4% overnight.

US GDP

The focus from here shifts to US GDP numbers due.

Tonight’s US second-quarter GDP is likely to have a major impact on markets with forecasts looking for a big drop from 3.1% last quarter to 1.8% in the June quarter.

The release is due at 8.30pm


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