The ECB unveiled a host of monetary measures to combat low inflation, from a cut in the floor for interest rates to an expansion of quantitative easing program. The ECB left its main refinancing rate unchanged at 0.05% but cut deposit rate by 10bp to –0.3%, markets were expecting a 20bp cut and the Euro strengthened after this announcement. The ECB press conference followed shortly after where Draghi announced monthly spending of €60bn until March 2017 and an expansion of its bond buying program by at least €360bn. Draghi also broadened the assets purchased to now include local and regional debt. Draghi said the ECB remains “willing and able” to act further if needed. The Euro was heavily bought during both announcements, sending EUR/USD higher and GBP/EUR tumbling yesterday afternoon.
UK services PMI was released yesterday morning. The service sector accounts for nearly 80% of UK GDP which is why this figure is so closely monitored and can heavily effect price action. Services PMI posted a better than expected 55.9, its best reading since August this year.
The main focus of today will be set on the Non-Farm figure, as this is the final reading before the Feds last meeting of 2015. As this gauge is a precursor to if the FOMC will raise rates the dollar will be very volatile as markets will try and decipher the number and the probability of a rate rise to be this year.