Euro rips above 1.07
The market wanted more than a 10 basis point cut in the deposit rate. Even if they deliver 15 billion more of QE for another six months, it won't be enough. The best Draghi could do would be to promise/hint at another deposit rate cut.
Ryan writes that they met expectations but that's not the way I see it. The market wanted 10-20 basis points on the deposit rate and they had floated the idea of a two-tier system. The way I see it was that 10 basis points was the bare minimum on this front.
That's why the euro shot higher.
If QE is only, say, another 10 billion/month, I'd bet on EUR/USD at 1.10 in no time.
