Euro Falls Amid ECB Draghi's Comments
November 21 2014 - 4:23AM
RTTF2
The euro weakened against most major currencies in the European
session on Friday amid European Central Bank President Mario
Draghi's speech that the firm anchoring of inflation expectations
is critical under any circumstances.
Speaking at the Frankfurt European Banking Congress, Draghi said
that the inflation situation in the euro area has also become
increasingly challenging. He observed the risk of too prolonged
period of low inflation becoming embedded in inflation
expectations.
The Governing Council has communicated its expectation that the
combination of all the monetary policy measures it has decided on
will expand the Euro system's balance sheet towards the levels
prevailing in early 2012, Draghi said.
The addition of purchases of covered bonds to ABS purchases will
allow the ECB to conduct interventions that will achieve the
intended effects, he added.
"If on its current trajectory our policy is not effective enough
to achieve this, or further risks to the inflation outlook
materialize, we would step up the pressure and broaden even more
the channels through which we intervene, by altering accordingly
the size, pace and composition of our purchases," he said.
In the Asian session, the Euro held steady against most major
currencies.
In the European trading, the euro fell to 3-day lows of 0.7970
against the pound, 1.2471 against the U.S. dollar and 1.4104
against the Canadian dollar, from early highs of 0.8001, 1.2567 and
1.4203, respectively. If the euro extends its downtrend, it is
likely to find support around 0.792 against the pound, 1.23 against
the greenback and 1.40 against the loonie.
Against the yen, the Australia and NZ dollars, the euro slipped
to 2-day lows of 147.08, 1.4484 and 1.5868 from early highs of
148.42, 1.4555 and 1.5962, respectively. The euro is likely to find
support around 144.80 against the yen, 1.43 against the aussie and
1.56 against the kiwi.
Looking ahead, Canada consumer price index for October is due to
be released in the New York session.
At 2:45 pm ET, Bank of England External MPC Member David Miles
will deliver a speech at the Festival of Economics, in Bristol.
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