Investing.com - Financial Markets Worldwide
📈 Fed's first cut since 2020: Time to buy the dip? See Tech-focused stock picksUnlock AI Picks

An Upbeat Mario Draghi Propels The Euro

ByBenzinga
AuthorBenzinga
Published 01/13/2013, 12:39 AM
Updated 05/14/2017, 06:45 AM

Heading into the weekend, the euro touched just below $1.33 on Friday morning after a positive press conference following the European Central Bank's monthly meeting. The euro traded at 1.3266 on Friday, as confidence returned to the eurozone.

The ECB decided to leave the record low interest rate unchanged at 0.75 per cent. The decision, although expected was reportedly unanimous; something that left investors who were expecting rate cuts later in the year puzzled. Following the decision, Bank President Mario Draghi gave an upbeat address in which he made it clear that the Finance Ministers were not considering any cuts later in the year.

In December, his address described a long and tedious discussion over the rate and whether or not the bank should cut it, but in January the tone had changed. He noted that the economy was set to recover in 2013, and that the recent economic improvements would eventually reach struggling countries without the help of the bank.

According to the Wall Street Journal, Draghi addressed the skyrocketing unemployment in the region by saying the ECB's job was to keep inflation low, and that monetary policy would not impact joblessness in the region.

The decision to keep such problems at an arm's length contrasts to what the US central bank, which has been quite aggressive in trying to protect the economy, has done. In an effort to reduce unemployment, the Federal Reserve has been buying mortgage bonds.

Recent bond auctions in Spain and Italy have given the eurozone a bit of hope that economies in Southern Europe, where most of the struggling economies are, can recover in 2013. In both countries, the governments exceeded expectations by drawing lower borrowing costs than in past auctions.

By Laura Brodbeck

Latest comments

Loading next article…
Install Our App
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.