Who’s in Charge? Draghi and Yellen Facing December Decisions

Janet Yellen and Mario Draghi will end the year shaping each other’s decision making.

That’s what some economists are saying a day after European Central Bank President Draghi all-but committed to fresh stimulus for the euro-area in December. The same month was already a focal point for investors debating whether Federal Reserve Chair Yellen would raise the U.S. benchmark for the first time since 2006.

The upshot is that the final month of the year, traditionally a time for winding down and vacations, will be the scene for two of the biggest policy decisions of 2015, with repercussions for currencies, stocks and bonds around the world. The outcome will either be the long-anticipated split in transatlantic policy or a united extension of easy money.

How the euro trades against the dollar in the coming weeks is a key factor for investors trying to gauge the outcome. Europe’s shared currency tumbled to a two-month low on Thursday after Draghi’s stimulus signal.


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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.