Five reasons why Draghi will not talk about the strength of the euro

7 Sep 2017 10:34 AM

ANZ analysts have identified five reasons why ECB governor Mario Draghi may not speak directly about the strength of the euro at Thursday's meeting:

  1. The euro is not overvalued and its rise is relatively moderate.
  2. The current strength of the euro reflects improved confidence in the outlook of the Euro-Zone economy and fading deflationary risks.
  3. The ECB is nearing the end of its stimulus program and has recently stopped its review of the possibility of lower interest rates.
  4. The average price of the EURUSD for the first eight months of this year was 1.1050 compared to the previous eight months of last year, which was 1.1160.
  5. ECB may try to weaken the exchange rate as it will soon provide details on the results of the current quantitative easing program, which may include details about a tapering program or possibly reduce asset purchases at the October meeting.

Tags: ECB EUR USD

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