The euro surged today after the European Central Bank left its monetary policy unchanged and President Mario Draghi said that Europe’s economy should start to recover this year. The shared European currency reached the highest level since May versus the Japanese yen.
According to some polls, as much as the one third of analysts has though that the ECB is going to slash rates. That did not come true and Europe’s central bank left its borrowing costs at the same level. What is more, Draghi talked about a recovery that should kick in later this year:
More recently several conjunctural indicators have broadly stabilised, albeit at low levels, and financial market confidence has improved significantly. Later in 2013 a gradual recovery should start, as our accommodative monetary policy stance, the significant improvement in financial market confidence and reduced fragmentation work their way through to private domestic expenditure, and a strengthening of foreign demand should support export growth.
The ECB followed the Bank of England in keeping its monetary policy stable. The decision of Britain’s central bank also boosted its currency, but the euro outperformed the pound.
EUR/USD surged from 1.3063 to 1.3271 as of 23:52 GMT today. EUR/JPY jumped from 114.78 to 118.41 — the highest settlement since May 5. EUR/GBP soared from 0.8152 to 0.8208.
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