Daily Management Review

Draghi's Speech in the European Parliament Knocked Euro Down


11/12/2015


Statements, made by Mario Draghi of the European Central Bank, have collapsed European currency.



swiss-image.ch/Photo by Monika Flueckiger
swiss-image.ch/Photo by Monika Flueckiger
The euro has fallen to 1,069 to the dollar immediately after Draghi’s speech at the European Parliament. He said that the ECB is ready to use all possible tools, if no changes in inflationary trend to the target value (2%) are recorded in September 2016.

- We have always repeated that purchase of assets within the program may continue after September 2016. If we do not see a sustainable correction in the inflation’s direction in line with our objectives, we can activated other instruments to enhance the effect of the asset repurchase program.

- If we came to the conclusion that our medium-term target of price stability was threatened, we would have used all tools available to the Central Bank in order to maintain an adequate level of monetary stimulus.

Investors interpreted this as a clear continuation of the quantitative easing program in the coming years and even increase of its volume. Draghi also said that inflation dynamics has weakened considerably against the backdrop of slowing global economy.

Downside risks, associated with global economic activity and trade, are obvious. Moreover, the dynamics of inflation have eased, mainly due to low oil prices and the delayed effect of the strong euro. In addition, price pressures remain very weak, and signals of core inflation’s stable turn became weaken now.

In addition, leaders of the European Central Bank are likely to further reduce the deposit rate at the December meeting.

The move, according to the ECB, will loosen the single European currency and, as a consequence, increase inflation. Judging by the dynamics of the market, traders are already including reduction in deposit rates by 0.1% in the prices. Some sources say that more severe decline is being considered.

In addition, there is a possibility of changing the program of buying assets, the volume of which now stands at 60 billion euros a month.

source: reuters.com






Science & Technology

Scientists Discover Largest Ever Under Water Volcanic Eruption Near New Zealand

Bitcoin craze increased load on the power grid to the maximum

PC And Server Performance Slows Down Due To Security Patches For Chip Flaws, Says Microsoft

Cybersecurity Firm Claims Cryptocurrency Monero Might Be Getting Funneled To North Korea University

The Way We Travel Will Be Changed by The Colorless, Odorless Gas - Hydrogen

EU's Big Change In Data Protection Rules Makes Businesses To Get Ready For It

Artificial Intelligence Helps NASA Find An 8th Planet In Orbit Of A Distant Star

Australian Research Success Could Mean Shatterproof Cell Phones Could Soon Be A Realityv

Top ten hi-tech events of the year

Tesla Considering Designing And Developing AI Chips On Its Own To Support Its Auto-Pilot Project

World Politics

World & Politics

Failure Of Last Ditch Effort To Secure Funding Results In A Partial Shutdown Of US Government

About 700,000 U.S. Twitter Users Reacted To Kremlin-Linked Trolls, Says Twitter, To Inform Users Directly

2017 Was Second Warmest Year Since Records Were Kept And It Had No El Nino Effect

France and Germany want to reform the eurozone

Take and go away: new approach to refugees in Europe

Both The Korean Countries Will Come Together In Olympic Talks

Parties of Germany agreed on the migrants problem

Munich Re: Natural disasters caused record damage in 2017