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Draghi dropped EUR/USD

EUR/USD hit a 2.5-year high of $1.3990 as the European Central Bank left monetary policy unchanged with a minimum bid rate at 0.25%.

Euro plummeted by 100 pips $1.3890 as the ECB president Draghi hinted on a rate cut in June on the press-conference that followed the policy announcement.  

Key points of the press-conference:

  • ECB open to cut rates in June if needed;
  • Euro’s impact on inflation is a serious cause for concern;
  • Inflation is expected to remain around present low levels for month ahead, rising in 2015 and reaching target only in 2016;
  • Economic risks remain to the downside, so the bank will closely monitor the geopolitical and exchange rate risks.

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