This disappointed some investors hoping for hints that the central bank could be ready to extend the timeframe of its QE programme beyond the exiting March 2017 deadline at its December meeting. The Governing Council instead “took stock” and will wait for additional economic data before deciding on the need for extra stimulus.

The Euro’s gains were brief and completely wiped out after Draghi suggested that an abrupt end to the QE programme was unlikely. The Governing Council did not discuss a tapering in the asset purchasing programme, contrary to recent speculation.

We think it is clear that the ECB currently has no intention to cut short its asset purchasing programme and remain of the opinion that the central bank will announce at least a six month extension in its QE programme when policymakers next convene on 8 December.

In the UK, Sterling slipped against the Dollar after President of the European Council Donald Tusk said EU leaders would not engage in Brexit negotiations at today’s EU summit.

The Australian Dollar also slumped by over one percent after a weak unemployment report heaped further pressure on the Reserve Bank of Australia to cut rates again in the coming months.

Major currencies in detail:

GBP

The Pound fell 0.2% against the US Dollar following yesterday’s comments from Donald Tusk.

Earlier in the day, UK retail sales remained surprisingly resilient in September, despite concerns following June’s referendum. Sales growth was flat for the month, although grew 4.1% in the year to September.

Upward revisions to August’s figures also made for a pleasing report, suggesting that consumer spending in Britain was undeterred by the uncertainty created following the leave vote.

However, an expected increase in inflation as a result of a weaker Sterling could weigh on retail sales volumes in the coming months.

Today will be void of any major economic news. Public sector borrowing figures this morning are unlikely to shift the Pound.

EUR

Mario Draghi’s comments yesterday sent the Euro 0.5% lower against the US Dollar to its weakest position in four months.

Draghi claimed yesterday that inflation in the Eurozone was likely to pick up over the next couple of months, with risks to growth also remaining tilted to the downside, mainly due to the external environment.

The overall tone of the press conference was fairly dovish. We think that policymakers are waiting until December before committing to extra stimulus. The central bank will have new staff projections available, while both the US Presidential Election and Italian constitutional referendum will be out of the way by the time the next meeting comes around in six weeks’ time.

Consumer confidence data this afternoon is expected to tick upwards slightly. Other than that today will be a relatively quiet end to the week in the Euro-area.

USD

The Dollar benefitted from Euro weakness on Thursday, with the currency rallying 0.5% against its major peers following the ECB press conference.

Initial jobless claims continued to point to a tightening in labour market conditions in the US. Claims were a touch above forecasts at 260,000 compared to the 250,000 consensus, although extended the longest streak of claims below the 300k level to 85 consecutive weeks.

Meanwhile, housing data surprised to the upside. Existing home sales rose by 3.2% in the month to September, ending a two month slide in the housing sector.

With no significant economic announcements in the US on Friday, we await next week’s third quarter GDP numbers as the next major data releases across the pond.

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