The euro dropped dramatically immediately after the European Central Bank cut interest rates to new record lows; but then, during Mario Draghi press conference reversed and turned sharply to the upside. EUR/CHF dropped to 1.0891 and then bounced to the upside, rising over a hundred pips as EUR/USD climbed above 1.1100. The pair recently peaked at 1.1021, reaching the strongest level since February 22. It was trading at 1.0005, up 40 pips from yesterday’s closing price, headed toward the sixth daily gain in a row. Market reaction “There is an argument that the market reaction could be more about a genuine belief that today’s policy measures will finally help lift Eurozone growth and inflation expectations. Four new TLTROs and buying corporate bonds certainly hone-in very directly on the real economy and the credit channel, and against that backdrop EUR strength may well be a sensible reaction. We don’t completely buy it”, wrote analysts from Westpac. The easing package from the ECB weakened the euro but then, as Draghi signaled that rates, at least for some time, are likely to stay around current levels, the euro recovered. Expectations about more easing are gone and could have strengthened the euro despite the announcements. Next week the Swiss National Bank will announce its decision on monetary policy. For more information, read our latest forex news.