EUR/USD Steady as Draghi Avoids Mention of Monetary Policy
- Mario Draghi steered clear of monetary policy in his opening remarks at a conference in Frankfurt that kicked off a busy schedule of speeches by the ECB President.
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European Central Bank President Mario Draghi confined himself to comments on risks in the banking sector at the start of a conference in Frankfurt Thursday, steering clear of the key question of monetary policy ahead of the next meeting of the ECB’s rate-setting Governing Council on October 26.
Traders are listening carefully for any hints on what the ECB will decide at the meeting, where it will consider whether to reduce its €60 billion per month asset-purchase program and how to guide the markets on the likely future “tapering” of its monetary stimulus of the Euro-Zone economy.
In the meantime, the EUR/USD pair has been largely driven by the US side of the equation, falling sharply in the US Wednesday after the Federal Reserve took a more hawkish stance than expected at the latest meeting of the Federal Open Market Committee. It steadied Thursday but remained below its level prior to the drop.
Chart: EUR/USD Five-Minute Timeframe (September 20-21, 2017)
Draghi’s speech marked the start of a busy few days for the President and his ECB colleagues (see here for the official schedule). On Friday he is due to give a lecture at Trinity College, Dublin, and on Monday he will face the European Parliament’s Economic and Monetary Affairs committee for what it calls a “monetary dialogue”. The following Friday he will be at a Bank of England conference to mark 20 years of independence for the UK central bank, taking part in a “conversation” with BoE Governor Mark Carney.
Meanwhile, the latest ECB Economic Bulletin, published Thursday, argued that recent volatility in the exchange rate presents a source of uncertainty that requires monitoring and the bank also said it will be publishing a new unsecured overnight interest rate and providing more information on money-market activity.
--- Written by Martin Essex, Analyst and Editor
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.