Forex headlines for May 8, 2014:

Highlights of Draghi’s press conference:

  • Draghi: Governing council “is comfortable with acting next time”
  • Rates to remain at present or lower levels for extended period
  • Council sees upside and downside risk to inflation
  • ECB ready to act swiftly if further easing needed
  • Draghi says inflation risks are broadly balanced
  • Draghi sees risks of de-anchoring medium-term inflation expectations
  • Strengthening exchange rate in context of low inflation is cause for serious concern
  • Governing council is not resigned to have low inflation for too long
  • Draghi says geopolitical euro inflows “quite sizable”
  • Draghi brushes off EONIA concerns

Other headlines:

This was the moment that rocked the euro:

Before Draghi made the comment, the euro was rising and climbed all the way to 1.3993. His early comments were “same old, same old” and it was 22 minutes into the press conference before he dropped the bomb.

Traders reeled for a moment and the move down wasn’t as quick as you’d expect. Once it got going it was swift and has continued right to the end of the session. Last at 1.3834 as Asia wakes up and starts selling.

The euro was weak and it pulled down cable to some extent but the US dollar wasn’t exactly strong. USD/JPY was on its back foot for most of the day, sliding to 101.46 after an early surge to 101.86.

The real winner was the Canadian dollar. USD/CAD busted stops below the April low of 1.0858 and down to 1.0814. It’s a suspiciously large move ahead of tomorrow’s Canadian jobs report.