QE to Run at EUR60B Per Month Until Dec. ’17, Or Beyond If Needed
Draghi: Information Confirms Broadly Unchanged Outlook
Expansion Is Solid, Broad-Based Across Countries, Sectors
Recent Fx Volatility a Source of Uncertainty, Requires Monitoring
Expansion Not Yet Translated to Stronger Inflation Trend
Underlying Inflation Ticked Up Slightly, But Still Subdued
Very Substantial Degree of Accommodation Still Needed
Ready to Increase QE If Outlook Less Favorable
To Decide in Autumn on Policy Calibration In Next Year
Policy Measures Supporting Domestic Demand
Staff See 2017 GDP Growth at 2.2% vs 1.9% Seen in Jun
Staff See 2018 GDP Growth at 1.8% vs 1.8% Seen in Jun
Risks to Outlook Broadly Balanced
Headline Inflation Likely to Temporary Decline Near Turn Of Yr
Domestic Cost Pressures Still Subdued
Underlying Inflation to Rise Gradually Over Medium Term
Staff See 2017 HICP at 1.5% vs 1.5% Seen in Jun
Council Members Spoke on Growth, Inflation and Exchange Rate
Recovery Is Base for Confidence That Inflation Will Eventually Converge
Recovery Remains Dependent on Monetary Policy
Consumption Is Doing Well, Because of Disposable Income Increasing
Exchange Rate Not a Policy Target
Will Have to Take Fx Into Account in Future Policy Decisions
The EUR extends its gains, rising well above €1.20 as ECB’s Draghi continues to speak. He has expressed concern about the strength of the euro and its potential to weigh on inflation.
However, he notes core inflation is “doing slightly better” and adds concerns about the exchange rate are “tempered by confidence that inflation will eventually converge, based on the good conditions of the economy.”
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments.
He has a deep understanding of market fundamentals and the impact of global events on capital markets.
He is respected among professional traders for his skilled analysis and career history as global head
of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean
has played an instrumental role in driving awareness of the forex market as an emerging asset class
for retail investors, as well as providing expert counsel to a number of internal teams on how to best
serve clients and industry stakeholders.