FX round-up: Berlin prepares contingency plans for Greece

Currency markets were relatively calm on Thursday ahead of the release of the minutes of the US Federal Reserve’s last rate-setting meeting and after a rather dull meeting of the European Central Bank’s (ECB) governing council.

As expected, the ECB’s rate setters maintained their main policy rates unchanged.

However, what most caught traders’ attention – especially in the FX space - were president Draghi’s remarks to the effect that markets should not be speculating on what the likely end date of the central bank’s programme of quantitative easing should be.

“I’m quite surprised, frankly, by the attention that a possible early exit of the programme receives, when we’ve been in this programme only a month […] it’s like asking yourself, after 1 km, are we going to finish this marathon?,” Draghi said in response to a journalist’s query.

Euro/dollar edged higher by 0.26% to 1.0677.

“The ECB confirmed that its QE programme would continue until at least September 2016. With inflation expectations range-bound since the start of the QE programme, we expect a continued commitment to low interest rates, which should keep downward pressure on EURUSD,” wrote economists at Barclays.

Acting as a backdrop, markets were keeping a close bead on events in Greece. To take note of, German newspaper Die Zeit reported that Berlin was working on plans to help Greece and its banks in case it misses a payment on it sovereign debt.

Output at America’s factories, mines and utilities dropped by 0.6% month-on-month as the previous month’s weather induced distortions to activity in the country’s utilities sector were unwound, figures from the Federal Reserve revealed.

Economists had been expecting a print of -0.3%.

Cable drifted 0.36% higher to 1.4836.