Draghi ends his term at the ECB with a dovish farewell
Outgoing European Central Bank President Mario Draghi sent a dovish farewell to market participants on Thursday, as the ECB Governing Council unanimously decided to keep interest rates at record low levels and reiterated the need for ultra-loose fiscal policy to combat growing downside risks.
ECB President Draghi will long be remembered for introducing QE in March 2015, as he battled to move the euro-area economy out of an economic depression. President Draghi will also be remembered for failing to bring back inflationary pressure to Europe, as he repeatedly fell short of meeting the central bank’s two percent annual inflation target.
The October ECB policy meeting provided more clarity over the controversial matter of reintroducing quantitative easing. President Draghi stated that the ECB Governing Council remained convinced that they needed to keep in place ultra-loose fiscal policy as downside risks remain prominent and inflation muted.
Yesterday, Europe released more weaker-than-expected PMI manufacturing data, as the October headline figures for Germany and the entire EU economy slumped below the dismal September readings. The recently introduce QE measures showed no sign of stopping the worsening decline underway in the EU manufacturing sector.
Former IMF Managing Director Madame Christine Lagarde will officially replace Mario Draghi as President of the European Central Bank on September 1st. Madame Lagarde is widely-tipped to continue to implement the dovish policies already introduced by her predecessor.
EUR/USD Daily Candlestick Chart | Source: ActivTrader
The euro currency has a bearish short-term bias against the U.S Dollar while trading below the 1.1110 level, leaving the pair exposed to further losses towards the 1.1040 technical area. EUR/USD bulls could attack towards the 1.1255 level if sellers are unable to keep the price below the 1.1110 level.
Written by Nathan Batchelor, External Analyst, ActivTrades
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