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- Mario Draghi gave no information on policy path ahead of Jackson Hole
Mario Draghi gave no information on policy path ahead of Jackson Hole
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Loading...President Mario Draghi gave little indication about the next steps for monetary policy in the euro zone during a speech on Wednesday ahead of a key meeting between central bankers.
The European Central Bank chief seemed to have learned from his own mistakes by avoiding commenting on how and when he might bring monetary stimulus to an end.
Back in June, Draghi rattled markets with a speech at a banking conference in Sintra, Portugal.
"All signs now point to a strengthening and broadening recovery in the euro area," he said at the time.
The euro was up about 0.17 percent on Wednesday against the U.S. dollar at $1.1780 after Draghi's speech and after new data showing better-than-expected PMIs (purchasing managers' index) for the bloc.
A stronger euro acts as a deflationary pressure, which the ECB wants to avoid. The euro has risen about 12 percent against the U.S. dollar so far this year, mainly on expectations of an ending to QE.
Draghi finds himself stuck between stronger growth and a stronger euro – a problem that according to Aranda-Hassel is likely to persist.
The ECB President is due to speak at the Jackson Hole meeting this Friday, where other central bankers and policy experts will be debating monetary policy.
Market participants once again do not expect any guidance from Draghi's address on Friday.
"He will probably be very, very careful with the language this time around. I do think he will stick to the mantra, which essentially is that they are slowly but surely going towards the exit but I don't think he wants to give us any acceleration in terms of speed," Aranda-Hassel said.
Source: Bloomberg Pro Terminal
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