Nordea Research discusses the reaction to today's ECB policy decision and flags a scope for more EUR/USD downside.
"Net asset purchases will end at the end of 2018, subject to incoming data.
Rates will remain at present levels at least through the summer of 2019 and in any case for as long as necessary.
The announcement of the end of net purchases was softened by Draghi’s dovish language.
We continue to expect the ﬁrst rate hike (25bp) in December 2019. The core inflation forecast was revised up, but risks to the growth outlook had increased.
Receiving strategies in short rates remain attractive, while we see more downside for the EUR/USD in line with our 3-month forecast of 1.15," Nordea argues.