EUR

As widely anticipated, the ECB left its benchmark rate at 1.0%, and market expectations remain that the ECB will not hike rates until H2 2010 at the earliest.  At the press conference ECB President Jean-Claude Trichet announced that the upcoming 12-month offering of unlimited funds at 1.0% interest would be the last as anticipated.  Likewise EZ growth for 2010 was revised higher rather dramatically by the ECB staff from -0.5% - +0.9% to +1.1% - + 1.5%.  Trichet also stated that projected inflation levels would remain below the ECB's 2% target in 2010 which is convenient for the ECB as it allows them to delay interest rate increases for the time being.  Trichet warned that the recovery was in part supported by factors of a temporary nature and he expected it to be uneven and still subject to high uncertainty.  EUR pairs fluctuated wildly on the news, as traders struggled to determine whether the overall data was bullish or bearish for the Euro.  Currently, the view that the ECB will hold off on raising rates is prevailing as EURUSD has dropped below 1.5100 towards 1.5080.

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