Euro

ECB president Mario Draghi disappointed pundits on Thursday as he decided not to implement any further stimulus measures but, more importantly, failed to give any forward guidance on what the bank could potentially do next if economic conditions were to deteriorate further. It is this notion that left investors scratching their head given no extension of QE was even discussed during their meeting, giving cause to get long the euro. It is not unreasonable for the ECB to not implement any further easing at this point in time, given the world is impatiently waiting for the US FED to make up their mind later this month as to whether to hike rates or not. However, to give no clues as to what the ECB is planning to do was perhaps a little shortsighted given recent economic data has been underperforming and inflation is nowhere to be seen. It is no secret that the bank is running out of bond assets to target for purchase, however, any signs of complacency will not be well received. The importance of fiscal policy and Brexit concerns were also cited in the press conference.

Sterling

Sterling has been pivoting around 1.3300 v the USD yesterday as Carney’s comments took some shine off the pair despite the dollar weakening on reduced rate hike expectations across the Atlantic. In light of recent better-than-expected economic data, cable is struggling to find direction as political commentary around Brexit has heightened this week. PM Theresa May and the European Council president Tusk met at 10, Downing Street, on Thursday with the intent of maintaining a strong relationship as Brexit negotiations begin. Tusk has clearly stated that the ‘ball is in the UK’s court and that he hopes we will be ready to start the process as soon as possible’. Chancellor Philip Hammond, in the meantime, has revealed that some EU migrants will be given preferential treatment after Brexit, pointing to highly-skilled workers like doctors and those in the city after Japan’s concerns around EU linkage and comments from the French President brought our ‘economic strength’ into light.

USD

The dollar waxed and waned as traders digested bullish US jobs data along with remarks from the ECB president that stopped short of signalling an imminent easing in European monetary policy. Keeping the Fed on a rate hike path, US weekly jobless claims unexpectedly improved, falling by 4,000 to 259,000, the fewest since mid-July. Doubts in an imminent Fed rate hike are bad for the dollar.