The European currency strengthened its position against the US dollar after the press conference of the president of the European Central Bank, which took place immediately after the regulator left its interest rates unchanged. However, it should be noted that the growth of the euro was more restrained than many analysts had predicted. Basically this was due to the fact that specific deadlines or measures regarding the repurchase program of the bonds were not announced.
During the speech ECB President Draghi, he said that rates will be at current levels for a long period, and in the framework of quantitative easing, the ECB will buy assets of 60 billion euros a month until December 2017 or longer, if necessary. As for the specific time frames, the ECB President said that this fall, it will be decided when to adjust the parameters of the policy next year. This leaves room for further strengthening of the euro in the medium term, therefore it would be wrong to talk of any major downward correction in the EURUSD pair.
The market reaction associated with buying the euro in the current situation speaks for itself. Mario Draghi also drew attention to the fact that the economic recovery seems strong and large-scale, and the available information confirms that the prospects for economic growth remain the same. Draghi very mildly expressed concern regarding the exchange rate of the European currency, saying that the recent volatility of exchange rates is a source of uncertainty that requires observation. Some analysts predicted today that there will be verbal intervention by the president of the European Central Bank, aimed at weakening the rate of the single European currency.
The ECB President also drew attention to the fact that when deciding on monetary policy, the central bank will have to take into account the exchange rate. As for inflation, according to Draghi, the core index has grown slightly, but a very significant monetary stimulus is still needed. Data on the labor market slightly supported the US dollar, as the number of Americans who applied for unemployment benefits increased last week.
The rise is associated with Hurricane Harvey. According to the report of the US Department of Labor, the number of initial applications for unemployment benefits for the week from August 27 to September 2 increased by 62,000 and amounted to 298,000. Economists predicted the number of applications to be at 241,000.
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