Summary:

  • Minutes ECB without a breakthrough
  • EUR holds onto a crucial technical level

The minutes from the ECB’s June meeting were highly anticipated by all who are interested in the future of the monetary policy and thereby the euro as well. However, there were no concrete remarks which could herald a sharp reversal in the ECB’s stance. Let’s take a closer look at the most important headlines:

  • some tightening in financial conditions to be expected
  • current stance broadly appropriate
  • price-stability outlook essentially unchanged
  • some concerns that small communication changes can be misperceived
  • QE easing bias can be reviewed if outlook improves

There is nothing spectacular there, nevertheless one needs to remind that since the June’s meeting there has been Draghi’s appearance which could have potentially changed investors’ perception. In effect, today’s release reaffirmed that the ECB is quite certain that an improvement in the euro zone is getting more broad-based, hence they could consider reviewing QE easing bias if the economic outlooks lightens further.

At the end, one of above-mentioned headlines seems to be especially noteworthy as the ECB expressed some concerns that even tiny tweaks in its communication could be misperceived (it could mean they are still concerned about too strong euro which could hamper getting inflation to the target below but close to 2%). As a result, ECB members could be more cautious with regard to their future speeches.

To sum up, the minutes could be taken with a grain of salt given the Draghi’s speech which took place afterward. That said, the euro bulls could have been reassured somewhat that the ECB is on track to adjust its stance going forward should the economic upturn keeps its momentum.

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The EURUSD is creeping up following the minutes and could be on track to get a recent high placed at around 1.1450. Source: xStation5

Having glanced at the chart above one could notice that buyers have been able to break an upper limit of a channel, consequently they could approach 1.1450 in the nearest future barring a terrific ADP release today or an excellent NFP reading being scheduled for tomorrow.