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What a week for forex trading volatility! We have two central banks that have decided against monetary policy changes but have caused a ruckus on their domestic currencies nonetheless. What’s up with that?!

What did the BOC and ECB have to say anyway? Let’s have another look at the highlights from the events:

Bank of Canada (BOC)

No rate cut but it was a close call – BOC Governor Stephen Poloz and his gang surprised the markets when they decided to keep interest rates steady at 0.50%.

If you recall, analysts had placed 50-50 odds for the event. Those calling for a rate cut pointed to further declines in oil prices while those who called it believed that the BOC wouldn’t want to rock the Loonie’s boat further with more policy changes.

Turns out both camps were mostly right. In his presser, Poloz revealed that the decision was a close call. Central bankers admitted that falling commodity prices were a setback and that growth had likely stalled in Q4 2015.

Heck, they even lowered their growth forecasts from 2.0% to 1.4% and 2.5% to 2.4% for 2016 and 2017 respectively! Concern for the Loonie’s stability won out though and prompted the BOC to hold off from any changes…for now.

Poloz went all Annie on the markets – The BOC is betting its bottom (Canadian) dollar that the sun will come out soon for the Canadian economy. Poloz said that the weak Loonie, as well as strong demand from the U.S., will help Canada’s economy shift to non-resource-related activities.

He also put the fiscal policies under the spotlight, saying that the BOC hasn’t factored in the government’s promises to boost infrastructure spending.

Lastly, Poloz shrugged off inflation concerns by saying that risks are “roughly balanced” with prices expected to rise from 1.4% to around 2.0% by late 2017.

The Loonie bulls loved it – Seems like the BOC knew their audience well, as the absence of a rate cut did indeed hold off more losses for the Canadian dollar. The Loonie had gained 126 pips (+0.86%) on the dollar; 83 pips (+1.04%) on the yen, and a nice 183 pips (+1.15%) on the euro throughout the session. Yowza!

European Central Bank (ECB)

No policy changes from the ECB…yet – As widely expected, the ECB kept its current policies in place this month. The deposit rate is still at a record low of -0.3% while the main refinancing rate remains at 0.05%. No changes were also made to the QE program after the central bank had extended the scope of its bond-buying program back in December.

Doomsday Draghi – Mario Draghi sent market bulls and bears all over the charts after he all but hinted at gloomy decisions from the ECB next month. Much emphasis was placed on inflation, as falling oil prices are forcing the central bank to adjust its projections and worry about “second-round” effects on the economy. Remember that Black Crack prices have dropped by almost 40% since the last ECB meeting when the members decided to cut rates and extend their QE program.

Draghi warned that the ECB members will likely review and “possibly reconsider” their policy stance next month and that there are no limits on how deep they’re planning to dig from their pockets. He said that committees have been already instructed to examine options and that we should expect new growth and inflation projections next month. Duhn duhn duhn duhn…

EUR spikes lower – Not surprisingly, the euro fell sharply at Draghi’s clearly dovish stance. Fortunately for the bulls, the equities markets cheered the decision and carried over a bit of risk appetite to the euro.

EUR/USD fell by 122 pips (-1.12%) to 1.0778 before recovering to 1.0888 while EUR/JPY plunged by 122 pips (-0.96%) before ending the session at 127.93.

There you have it, folks! We have two central banks that have decided against monetary policy changes but are open to more easing in the future. Which of the two do you think will ease first?