We must admit that Mario Draghi did something that no one expected from him. Almost all observers were confident that after the announcement of the results of the meeting of the ECB, the single European currency will be able to improve its position. This confidence was based on the fact that no concrete steps will be taken, and the formulations will be vague and ornate. The fact that investors approached the meeting with fears about a possible extension of the quantitative easing program, and the absence of any specifics will reduce such risks. However, the outcome of the meeting can be characterized quite specifically - the ECB prolongs the program of quantitative easing. Even before the meeting, the ECB's plan was that the quantitative easing program, which currently amounts to 30 billion euros a month, will be in effect until September. However, now it will be in effect until December, however, from October its volume will decrease to 15 billion euros a month. This is nothing more than an extension of the quantitative easing program, and not the first. In other words, the biggest fears became reality. The worst thing is that the ECB is not doing this for the first time, so there are no guarantees that this will not happen again. So it is not surprising that the single European currency was swiftly tumbling down.
The position of the single European currency is further complicated by US statistics, which turned out to be unexpectedly good. In particular, the growth rates of retail sales did not slow down, but accelerated from 4.8% to 5.9%. The number of applications for unemployment benefits fell by 53, 000. So, without the ECB's decision to extend the quantitative easing program, the dollar had many reasons for growth.
Today, the single European currency has a chance to improve its affairs somewhat, as the final data on inflation can confirm its growth from 1.2% to 1.9%. Such a rapid rise in inflation can give reason to believe that the ECB will no longer extend the program of quantitative easing. At the same time, the slowdown in industrial production in the US is expected to slow from 3.5% to 2.7%.
Most likely, the euro/dollar pair will rise to 1.1650.
