Hot Topic – the European Central Bank

this week’s topic is the European Central Bank – so let’s talk about what Happened.

• On Thursday, the ECB decided not to proceed with changes to the bloc’s monetary policy and also left interest rates unchanged.
• The EUR/USD immediately jumped 50 pips peaking at 1.1058.
• While on Friday the U.S. dollar rallied to a four-month high against a basket of major currencies, boosted by the monetary policy outlook.

So what led to this situation?

• In the conference that followed, ECB President Mario Draghi commented on Brexit and the geopolitical instability resulting from the decision.
• He also highlighted the declining state of the Eurozone’s banking industry
• The decision taken on Thursday means that the main refinancing rate remains at 0%, the marginal lending facility rate at 0.25%, and the deposit facility at -0.40%.

So What’s going on This week?

• Investors will be looking atWednesday’s highly-anticipated FOMC statement for guidance on the pace of future US interest rate hikes which is at 6PM GMT

• While on Friday, the markets await amonetary policy announcement from the Bank of Japan amid growing expectations for further stimulus.
• Lastly, be sure to keep your eye on the GBP – Since the U.K. shocked the markets with their decision to leave the EU on June 24, the pound has already declined nearly 12% against the dollar and analysts are expecting further declines

That’s it for this week once again I’m Nima and you’ve been watching the Hot Topic.

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Source: Easy Forex Forex.Info