EURUSD slipped as ECB's Draghi adopts no hawkish shif
The Euro witnessed itself drop versus the US Dollar on Wednesday due to the reports released by two sources that European Central Bank President Mario Draghi will not deliver fresh policy steer at the U.S. Federal Reserve’s Jackson Hole conference beginning on next Thursday, overshadowing trader’s expectations for a near-future hawkish tone from ECB ‘s boss.
An ECB spokesman averred that Mario Draghi will only focus on the symposium advancing the global economy in his upcoming conference. The sources also said that Draghi intended to hold the agreements of the last July policy meeting until the autumn.
"Expectations that this will be a big monetary policy speech are wrong," one of the sources reported.
The key reason for this disillusionment might come from inflation which was released in July to be by 1.3% y/y, remaining well below the central bank’s target of 2% over the medium term in spite of the faster-than-expected rising employment data and the fact that the Eurozone economy has grown for 17th straight quarters. In addition, the recent Euro overshooting has contributed a part of tightening policy, suggesting that interest rates might be left unchanged in some next months.
The Euro-cross currency pairs have found fuel to rise in recent weeks because of positive expectations that ECB’s president is likely to start recalibrating monetary policy to be sensible with the current solid economic growth in his yearly grand speech on Aug 25th. This anticlimax may cause the Euro to be unable to head higher until the conference takes place and the actual information is confirmed next week.
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