The Euro dollar suffered a heavy sell-off against the Greenback as investors squared out of their long positions following Mario Draghi’s interest rate decision and his press conference speech. Weak Eurozone didn’t help matters, EUR/USD slid down from 1.1391 down to 1.1289 and breaking the long-term support of 1.1300.
Flash Manufacturing for the Eurozone fell to 50.7 in January down from 51.1 in December, this was the lowest level since 2013. Export orders continued to slide. The culprit behind the subdued momentum remains global demand, but trade wars and the still embattled automotive sector were reportedly at play.
The ECB left its monetary policy unchanged which was widely expected. However, the ECB has finally admitted that the growth risks are now biased downwards, blaming protectionism for the change. The ECB stated that there would be no changes in their stance until the next staff projections are updated in March.
Looking ahead, German Ifo business climate is due for release. The Business Climate score has slowed down for four straight months, falling to 101.0 and missing the estimate. The negative trend is expected to continue, with an estimate of 100.7 points.