The highlights of Mario Draghi's speech on the monetary policy of the ECB:
- Inflation will rise faster than expected
- In the short term, inflation will rise gradually
- The ECB will keep interest rates close to current levels for a long time
- We will keep a QE of €30b by the end of September 2018. and more if necessary.
- We remain ready to increase or extend QE
- The recent instability of the euro is a source of uncertainty and this will be monitored, with the ECB intervening if necessary. The expensive euro discourages inflation.
- Have we achieved success? No, the inflation is low and growth is far from acceptable.
EUR reflects the news positively, with Dovish's forecasts of market participants diverging heavily from Draghi's speech. Rising inflation in the medium term and hopes the ECB's higher growth, led to this, EUR/USD to reach a new high, as is currently trading at levels around 1.2475 - levels last reached in December 2014.
Jr Trader Petar Milanov
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