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    Asian Session – Euro tumbles to fresh 11-year lows ahead of ECB

    Posted on March 5, 2015 by the XM Investment Research Desk at 7:58 am GMT

    Mario Draghi 11The euro registered fresh lows in late Asian trading, as the market braces for the ECB meeting and Draghi press conference later on.  The euro fell to as low as 1.1025 before rebounding back to around 1.1050 as the ECB was preparing to unveil the details of its 1 trillion euros plus Quantitative Easing scheme.

    More specifically, the ECB should explain what kind of government bonds it will buy, duration and other details about the whole procedure.  In addition, the situation in Greece will also be discussed, as the ECB is providing liquidity to Greek banks under certain conditions.  Greece could be counting on cash from its banks, which the banks themselves will have to borrow from the ECB, in order to stay afloat in the coming months if no fresh EU / IMF loans are made.

    In Australia, the RBA deputy Governor Lowe said that the aussie was closer to its fair value after its recent declines, but that the bank would probably continue to cut interest rates.  Therefore his speech had a mixed effect on the aussie which fell to around 0.7810 compared to highs around 0.7850 the previous day.  Australian economic data such as the country’s trade balance for January showed a slightly larger-than-expected trade deficit at 980 million Australian dollars versus 950 expected.

    Looking ahead, apart from the ECB meeting and the Bank of England policy announcement, fourth quarter productivity data out of the US and weekly jobless claims will attract attention.  Post-ECB, the market’s focus will shift totomorrow’s employment report.

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