Much like it did on Tuesday, the euro stayed relatively range-bound yesterday as markets remained cautious ahead of this evening’s speech from European Central Bank (ECB)Governor, Mario Draghi. An announcement from Barclays that it was to lower its one-year forecast for the currency was not enough to shift the markets too much ahead of today’s speech. However, should Draghi be particularly negative today, expect the impact of the Barclays announcement to have more of an effect. Worryingly for anyone converting euros to dollars, Barclays forecast the euro to drop to as low as $1.10 in the next 12 months – levels not seen in over 10 years.
Things to keep an eye on this evening in Draghi’s speech will be any guidance around asset-backed securities purchases and other easing strategies, which, if employed, could push down the euro further.