Faced with the risks to European growth that have been mentioned many times, Frankfurt has decided to act in two ways.

On the one hand, the monetary authority warns that rates will now remain at their lowest historical level at least "until the end of this year". Although most investors have already forgotten about it, the summer of 2019 was officially the previous horizon in sight.

On the other hand, the ECB will launch a new wave of giant and cheap loans to banks between September 2019 and March 2021, all with a two-year maturity. A way to support credit and consumption.

At a press conference, Mario Draghi supported these decisions with a significant review of the central bank's expectations for growth and inflation:

Growth forecasts March 2019 (December 2018)
-2019 : +1.1% (+1.7%)
-2020 : +1.6% (+1.7%)
-2021 : +1.5% (+1.5%)

Inflation forecasts March 2019 (December 2018)
-2019 : +1.2% (+1.6%)
-2020 : +1.5% (+1.7%)
-2021 : +1.6% (+1.8%)

Although he considers the probability of a recession in the monetary Union to be "low", he noted that the ECB no longer expects to achieve its inflation target (close to but below 2%) before 2022.

Graphically, the Euro records new annual lows and tests again a key support at USD 1.1224. If this threshold is crossed at daily close, the leading foreign exchange market pair would open the way for a more pronounced decline towards USD 1.1129 and USD 1.10. A scenario made credible by the inventory of current positions: 80% of retail traders' positions are long, while professional investors have not been so widely sold since the end of 2016.