At the post-decision press conference, ECB President Draghi surprised participants with dovish remarks. Draghi very specifically noted that the committee would review and possibly reconsider monetary policy at the next meeting in March, when the latest round of ECB staff forecasts will be published. He repeated several times that the ECB has not only been highly successful with its prior unconventional monetary policy actions, but that it still has plenty of tools left to help it achieve its mandate.
Draghi justified his more dovish stance by warning that conditions have changed since December, specifically citing the 40% decline in oil prices since that time, an increasing possible correlation between inflation expectations and lower oil prices, and the chance that 2016 inflation levels will drop even lower due to the commodity price implosion. EUR/USD has been pivoting around 1.0900 for the last three sessions, and after Draghi’s big reveal the pair plummeted as low as 1.0780. – Source: TradeTheNews.com