This week investors have their attention on central banks. In the United States the Federal Reserve is gathering to decide what to do with interest rates amid slowing growth. In Europe, the central bank is also up to a similar ordeal.
Today the President of the European Central Bank, Mario Draghi, spoke about the current position of the ECB regarding monetary policy. Growth in the European Union has been sluggish for years now and the ECB has already established low interest rates, weakening the euro in favor of improving inflation. Today Draghi said that the ECB will be prepared to start another round of stimulus packages if they do not see an improvement in the pace at which inflation is growing.
According to Draghi, there are assets that the ECB has not previously touched which can be targeted by the new stimulus measures. He also mentioned the possibility to adjust the policy interest rates, but this needs to be done very carefully, as the ECB is already imposing low rates across the eurozone.
These statements about renewed dovishness have a weakening effect on the euro.
