Forex Flash: Draghi highlights market fragility and mitigated credit – Deutsche Bank

According to Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, “Draghi’s overall message at the post-ECB press conference seemed to be that monetary policy would remain accommodative.” Like last month, Draghi talked about the remaining market fragility and reiterated that credit is yet to flow to the real economy.

Moreover, “The ECB President didn't appear too concerned about LTRO payments, however his comments that the euro's strength was creating downside risk to inflation and an implicit downside risk to growth was taken to be dovish enough to send the EUR/USD lower.” they add. Interestingly, Draghi mentioned that the ECB had "taken note" of the Irish government's proposal to liquidate the Irish Bank Resolution Corporation and swap promissory notes for longer-term Irish government bonds. The move was seen by some as a form of monetary financing, though Draghi stopped short of offering an opinion, commenting instead that "this is not the last word on Ireland".