Euro Higher After ECB Surprise


The common currency euro continues to move higher against the greenback, moving away from a 2-month trough after the European Central Bank’s Mario Draghi surprised investors. The ECB president was optimistic over the Euro zone outlook while the policy setting committee kept rates at current levels. Analysts had been expecting an interest rate cut and a bleak outlook. Markets had already priced in a possible rate cut so Thursday’s news helped to shift sentiment for the Euro. The official ECB statement said rates would remain at existing levels. Mario Draghi, who is stepping down in November, had been expected to deliver a more dovish stance. Analysts say that that suggests that the ECB’s Governing Council have not yet reached consensus. As a result September’s policy meeting will be even more crucial.

As reported at 10:25 am (JST) in Tokyo, the EUR/USD was trading higher at $1.1149, a gain of 0.0135%; the pair has ranged from a low of $1.11425 to a high of $1.11500 in today’s session. The EUR/GBP was trading at 0.8951 Pence, flat in the session.

US 2nd Quarter GDP Eyed

Later today markets will focus on the preliminary U.S. GDP results for the 2nd quarter; the latest poll of economists suggests a decline in growth to 1.8% annualized from 3.1% in the previous period. The GDP Price Index is expected to rise to 1.3% from 0.6%.



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