ECB did not dampened the enthusiasm for the euro - BBH

ECB President Draghi did not argue forcefully enough at yesterday's press conference to dampen the enthusiasm for the euro, according to the analysis team at BBH.  

Key Quotes

“The initial dip was quickly bought and the euro was chased above last year's high near $1.1615.  The gains have been extended to nearly $1.1680 today. The next target is the August 2015 near $1.1715.  There continues to be talk of keen interest in $1.20 strikes and the indicative pricing in the options market is consistent with euro call buying.”

“The ECB retained the warning that it could boost its asset purchases if necessary, but no one really believes it will.  There was nothing in Draghi's comments that undermine our expectation that at the September meeting, the ECB will announce that it will reduce the assets it buys but extend the purchases through the first part of next year.  The first robust expansion in a decade still needs to be nursed to ensure that it absorbs the spare capacity and boost wages and prices.”