ECB President Mario Draghi Is Ready to Deploy Another Round of LTRO

September 24, 2013

The US dollar was traded slightly downwards on Monday to most major currencies amid no important US macrostatistics, stock markets decrease and euro-zone ambiguous statistics. The yen grew on the back of stock markets decrease and the euro was negatively affected by euro-zone manufacturing PMI decrease and also ECB President Mario Draghi’s speech. The Australian dollar looked better, which was favored by Chinese Manufacturing PMI growth. 

US Flash Markit Manufacturing PMI dropped to 52.8 p. in September from 53.1 p. in August against the expected growth to 54 p. The decrease happened mainly due to the reduction of new orders and worsening of employment situation. The dollar couldn’t support Chicago Federal National Activity Index which exceeded the expectations in August and grew to +0.14 compared with -0.43 in July after having been at the negative territory for five months. Three month average of the index rose to -0.18 from -0.24.



Fed member William Dudley said on Monday that the economy was not yet so strong that the Fed could start reducing stimulation. Another Fed member Dennis Lockhart making speech on Monday also said that it would be difficult for the Fed to find a reason for tapering off QE at the nearest meeting on October as published economic data are ambiguous. Recently the dollar has been pressed by the political debate over government spending, which may have a negative effect on the US economic growth. Past Friday US president Barack Obama announced that if the Congress didn’t vote for raising the upper threshold of the public debt, another financial crisis may come into the country.

The euro was traded downwards despite the initial reaction to the landslide victory at the parliamentary elections in Germany on Sunday of the ruling party headed by Merkel who actually may have problems with forming a ruling coalition. Flash Manufacturing PMI of France, Germany and the whole euro-zone dropped in September although it was expected to rise. Euro-zone Manufacturing PMI dropped for the first time after 5-month growth – to 51.1 p. in September from 51.4 p. in August.     

Meanwhile, the same Service indexes rose and turned out better than expected. Euro-zone Composite PMI grew to 52.1 p. – the highest reading since July, 2011 in comparison with 51.5 p. prior month. Some pressure on the dollar was put by the ECB President Mario Draghi’s speech in European Parliament where he said that the central bank was ready to use any instrument including LTRO if needed. Another round of the unlimited loans can weaken the euro.


Australian dollar was traded upwards after the release of HSBC Flash Manufacturing PMI which grew to 6-month high 51.2 p. in September against the August reading of 50.1 p. having exceeded the expectations and continued the growth for the second month in a row. China is the largest trade partner of Australia. Chinese economy will accelerate growth rates till the end of 2013, according to the world largest investment company BlackRock. Earlier the Bank of America, UBS and ING raised Chinese economic growth estimate for 2013 after Chinese industrial output statistics data in August showed the most significant growth for past 17 months.

Publication source
MasterForex information  MasterForex reviews

October 21, 2016
Gold prices drop in Asia amid stronger greenback
On Friday, gold dropped during Asia trade amid a strengthening greenback as well as surging chances of a rate hike weighing on the hedge commodity...
October 21, 2016
ECB holds the rate unchanged with the pressure on Draghi
After a brief upturn seen in the late Asian trading, the currency retreats to the Wednesday close showing a tepid response to the ECB policy update. The New York FED leader William Dudley comments offered a support to the Dollar rally although the focus remained on the US inflation...
October 21, 2016
EURGBP Tests Major Support
This morning we saw the release of German PPI YoY and MoM figures for September. The former fell to -1.4%, compared to expectations of -1.2%. The latter was -0.2%, in line with expectations...

XM Rating
OctaFX Rating
Larson&Holz IT Ltd Rating
FIBO Group Rating
Vantage FX Rating
FxPro Rating

Anyoption Rating
OptionFair Rating
24option Rating
Banc De Binary Rating
Empire Option Rating
365BinaryOption Rating