Euro slides, stocks climb as Draghi plays down inflation rise

Record ID: 164903

  • Title: Euro slides, stocks climb as Draghi plays down inflation rise
  • Date: 19th January 2017
  • Summary: FRANKFURT, GERMANY (JANUARY 19, 2017) (REUTERS) WIDE OF TRADING FLOOR SIGN READING (German): 'BOURSE FRANKFURT' WIDE OF TRADERS WITH DAX BOARD IN BACKGROUND TRADERS TRADING BOARD SHOWING EARLY DAX OF 11624,11 POINTS TRADING BOARD SHOWING RATE CHANGES VARIOUS OF TRADERS DAX GRAPH MORE OF TRADERS WIDE OF TRADING FLOOR TRADING BOARD SHOWING HIGHEST DAX OF 11628,05 POINTS AT 1342 GMT WITH PAN TO LOWEST DAX OF 11580,06 POINTS AT 1025GMT MORE OF TRADERS PAN ACROSS TRADING BOARD SHOWING BANK SHARES (SOUNDBITE) (German) CAPITAL MARKETS ANALYST AT ODDO SEYDLER BANK, OLIVER ROTH, SAYING: "Mario Draghi has kept the agitation at the markets reasonably contained at his news conference, but he didn't disappoint us, he sustained the bond purchase programme and the policy of the cheap money. Of course he said that this is going to be checked from time to time as some have already talked about more financial drag ahead of the interest rate council meeting. The inflation increased recently, but Mario Draghi and the ECB council stick to their programme of the cheap money for now." TRADER DAX GRAPH CAPITAL MARKETS ANALYST AT ODDO SEYDLER BANK, OLIVER ROTH, SAYING: "Mario Draghi is very right to send a reminder about the reform inability of the European countries as structural changes didn't happen. It is right for him to say that the economic development in Europe is stammering and that recent inflation is based mainly on increasing energy prices. However, if the energy prices will stay on this level or even increase a bit more, if the dollar gets stronger compared to the euro, which would push the comodity prices, then he (Draghi) could start thinking about getting away from the zero interest rates policy step by step, but it is not as easy as it seems, but for now and the coming six months the all-clear can be given." MORE OF TRADERS BULL FIGURINE WIDE OF TRADING BOARD WIDE OF TRADING FLOOR
  • Embargoed: 2nd February 2017 15:47
  • Keywords: ECB interest rates DAX
  • Location: FRANKFURT, GERMANY
  • City: FRANKFURT, GERMANY
  • Country: Germany
  • Topics: Economic Events
  • Reuters ID: LVA0015ZQXVNX
  • Aspect Ratio: 16:9
  • Story Text:The euro fell to a day's low against the dollar and a 10-day low against sterling on Thursday (January 19), while European stocks hit a day's peak after European Central Bank President Mario Draghi played down a recent rise in eurozone inflation.
    The euro dropped to as low as $1.0603 EUR= and to 86.26 pence against the pound before making a partial recovery.
    Europe's Stoxx 600 share index moved out of the red as Draghi spoke too and went as high as 363.83 points. Eurozone bond yields and forward money market rates, which move inverse to prices, also edged off the day's highs.
    The European Central Bank kept its super-easy monetary policy unchanged as expected on Thursday and its president, Mario Draghi, told critics of his stimulus path to be patient and wait for the eurozone's recovery to take firm hold.
    With growth slowly picking up pace, the ECB kept its various rates at next to nothing or even negative and asset buys at a record pace. It reaffirmed that rates would stay at their current or lower levels for an extended period and that it was also ready to increase or extend it bond purchases if the outlook worsens.
    "Mario Draghi has kept the agitation at the markets reasonably contained at his news conference, but he didn't disappoint us, he sustained the bond purchase programme and the policy of the cheap money. Of course he said that this is going to be checked from time to time as some have already talked about more financial drag ahead of the interest rate council meeting. The inflation increased recently, but Mario Draghi and the ECB council stick to their programme of the cheap money for now," Oliver Roth, capital markets analyst at Oddo Seydler Bank, told Reuters TV at the Frankfurt stock exchange.
    "Mario Draghi is very right to send a reminder about the reform inability of the European countries as structural changes didn't happen," Roth added, agreeing with the ECB President that the recent inflation was based to a large extent on the increased energy prices.
    "However, if the energy prices will stay on this level or even increase a bit more, if the dollar gets stronger compared to the euro, which would push the commodity prices, then he (Draghi) could start thinking about getting away from the zero interest rates policy step by step, but it is not as easy as it seems, but for now and the coming six months the all-clear can be given," he said.
  • Copyright Holder: REUTERS
  • Copyright Notice: (c) Copyright Thomson Reuters 2017. Open For Restrictions - http://about.reuters.com/fulllegal.asp
  • Usage Terms/Restrictions: None
Register