THE TAKEAWAY: ECB keeps interest rate at 0.75% for the fourth straight month -> Draghi to discuss decision at 13:30 GMT -> Euro trading unchanged
The European Central Bank left the benchmark interest rate at 0.75% following their November meeting, and the decision was as expected. It is the fourth straight month that the central bank has left the interest rate unchanged, as ECB President Draghi has previously mentioned that they are looking towards the OMT bond purchase plan to help provide stimulus to struggling economies, in place of a less effective interest rate cut.
However, the OMT purchase plan has yet to be put into effect. Spain is the first country being looked at as a possible recipient of the bond purchases, yet the Spanish government has so far refused to ask for a bailout from the ESM that would be required for bond purchases. Draghi will hold a press conference to discuss the decision at 13:30 GMT.
Cutting the interest rate is considered currency negative, so the as-expected hold of the interest rate had no significant effect on currency trading. The Euro fell about fifty points against the US Dollar earlier in the session, dropping to 1.2750. Support could now be provided at 1.2740, by the 38.2% retracement of the rally from July through September.
EURUSD 15-minute: November 8, 2012