ECB President Mario Draghi has signalled that there is a good chance that policymakers will add stimulus to the eurozone economy in December and that is sending the 19-nation euro down today. Also dropping are commodities.
Earlier, Mario Draghi addressed the European Parliament, expressing his disappointment in current inflation dynamics and insisting that they are week. He said that normalizing a desired level of inflation could take some time, and he hinted that more stimulus could be announced after next month’s ECB policy meeting.
The result is that the euro is heading mostly lower, especially against the US dollar, which is expected to see a rate hike next month. The difference between five-year bond yields in the United States and the eurozone is its greatest since 1999. There has been some dampening of euro losses, thanks to comments from an executive board member who says the policy is still open to debate, but many feel that Draghi’s confidence is a sign that more stimulus is likely on the way.
At 14:34 GMT EUR/USD is heading lower, dropping to 1.0740 from the open at 1.0743. EUR/GBP has regained some lost ground to 0.7072 from the open at 0.7060. EUR/JPY has also moved higher to 132.3090 from the open at 131.9780.
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