(Bloomberg) --
Option traders were right to expect the least exciting European Central Bank policy meeting in more than five years.
Even though the euro declined as much as 0.3%, it's still languishing within a tight range that has held since early December. One-month implied volatility, a measure of swings in the currency, slipped to an all-time low.
President Christine Lagarde declined to reveal her preference on inflation strategy and thus remained neutral over the course of monetary policy. She said euro-area governments need to “substantially step up” structural reforms, which may be a signal that the ECB won't alter its policy mix anytime soon. That lowered expectations for currency volatility.
The euro retreated 0.2% as of 2:36 p.m. in London to $1.1070.
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- NOTE: Vassilis Karamanis is an FX and rates strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice
To contact the reporter on this story: Vassilis Karamanis in Athens at vkaramanis1@bloomberg.net
To contact the editors responsible for this story: Dana El Baltaji at delbaltaji@bloomberg.net, William Shaw
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