Of course he had other motives. He´s senstitive to a dollar rout ' they all are. Such a rout and sudden rise in the Euro could derail any chance of a recovery in the Eurozone´s highly dependant export market.
[23:18 EUR/USD: Opinions Divided On Why Trichet Turned "Dovish"] Sydney, April 7: Analysts are divided as to why ECB President Trichet went out of his way to dampen expectations of a rate hike in May. One theory is that the ECB was starting to worry about the recent strength of the Euro against the USD and JPY and forecasts of high it would go between now and the end of the year. There has been talk recently that the ECB and EZ Finance Ministers were concerned that the strength of the EUR/JPY in particular would hurt the export-led recovery in Europe and the combination of stagnating growth and higher interest rates would only exacerbate the problem. Another theory making the rounds is that a split has developed within the ECB council between the "hawks" and "doves" and the even-handed comments from Trichet yesterday were designed to stop individual members speaking out and giving the impression of a house divided. At least one consultant feels that the ECB might still raise rates in May and many feel that we will at least see a hike in June. In the meantime it is likely that the EUR/USD and EUR/JPY will correct lower.
I also think EUR is going lower. I don't think all of the pre-Trichet buying has been reversed yet. I think there's at least another 100 pips of downside.
Looks like you guys were right. I am still in my longs for now. I actually added to them this afternoon. Have a good weekend. DRT
Closed my 3 short in EC from 1.2348 and 1.2284 for about 500 pips. Was a very nice week. I think there will be a buying opportunity next week.