020 7898 0500The only economic event of note from the eurozone on Friday was a speech delivered in Florence by the European Central Bank’s President, Mario Draghi. He began by acknowledging that the eurozone area looks set to exit the financial crisis in a more resilient condition than it entered, which is certainly true. However, it is fair to say that this was hardly headline news.
He went on to speak for some time, but rather frustratingly failed to acknowledge eurozone inflation or monetary policy. It remains to be seen what the ECB will do with its quantitative easing programme, which is scheduled to end in September 2018 and whether or not interest rates will be increased anytime soon. However, on this latter point, we can be fairly confidence there will be no rate hikes for the foreseeable future; the ECB has already said as much and little has happened in recent times to persuade the markets this mindset will change.
The euro pushed higher against the dollar on Friday and traded sideways against sterling. It is clear that the dollar has been the best performer over the last couple of weeks which Draghi will surely be happy about. Euro strength has affected export growth, so perhaps there will be a boost in the near future, especially if the dollar continues has it has been.
