The euro rallied briefly against its major peers today after Mario Draghi, the President of the European Central Bank, outlined a hawkish outlook during the press briefing after the bank’s meeting. The euro gained significantly as the ECB revised its growth and inflation outlooks for the Eurozone and announced that the quantitative easing program would continue until December.
The euro gained significantly against the Japanese yen, the British pound and the US dollar although the currency had retraced most of its gains at the time of writing.
The euro rallied after President Draghi revised the inflation outlook for the European Union from 1.3% to 1.7% for this year, and the markets priced-in this change. President Draghi also stated that the growth prospects for the EU had improved greatly and that surveys indicated that the economic recovery could broaden.
The ECB also left its base lending rate at 0.00%, while its marginal lending facility was maintained at 0.25%. The ECB also indicated that its the inflation outlook for the European Union from 1.3% to 1.7%.
The euro’s future performance is likely to be affected by the release of non-farm payrolls and unemployment data in the USA tomorrow given that the US dollar is a major competitor.
The EUR/USD was trading at 1.0583 as at 16:58 GMT having retraced some of its gains from a daily high of 1.0615 after Draghi’s speech. The EUR/GBP was trading at 0.8700 having hit a high of 0.8719 earlier today. The EUR/JPY was trading at 121.41 having rallied to a high of 121.85 after the speech.
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