19/02/2013
Recap on Draghi's speech yesterday!!!
Draghi keeps downside pressure on Euro
The European Central Bank President asserted downside pressure on the euro on Monday after he said downside pressures to growth persist and economic indicators signal weakness with the start of 2013.
Speaking at the European Parliament in Brussels the ECB president said that “indicators signal further weakness at the beginning of 2013” Draghi attributed the weakness to subdued foreign demand and weak consumer and investor sentiment. Draghi still sees gradual recovery later this year.
The EURUSD weakened slightly on the comments but continues to hover within a tight range with the absence of volume in the market on U.S. President’s Day holiday.
The pair declined from $1.3563 areas to strike $1.3330 areas at the comments still above the day’s intraday low set in earlier hours of the session at $1.3321.
The pair returned now to hover around $1.3350 areas which keep the bearish pressure on the euro eying $1.3270 areas.
The president also commented on the euro’s strength indirectly saying that inflation pressures remain contained and the ECB should assess whether the euro altered the outlook for inflation and price stability. Nevertheless, Draghi said that exchange rates should reflect fundamentals and the euro is around its long-term average and the exchange rate is not a policy target.
The president said the G-20 statement was not a disappointment as he stressed that the euro is not the policy target but “it is important for growth and price stability”.
Regards,
