The Euro has declined for a sixth day straight against the US Dollar after European Central Bank President Mario Draghi said that the ECB’s monetary policy will stay accommodative, a move that has weakened the appeal of European assets.
Draghi revealed that an exit from the ECB’s exceptional monetary policy measures remain distant as he addressed the lower house of parliament in France. He added that there were still downside risks to growth in the Eurozone economy and that the ECB was prepared to take further action.
On our policy stance, let me say that it’s been accommodative in the past, it is accommodative in the present time and will stay accommodative for the foreseeable future,” Draghi said.
“Our exit – as Benoit Coeure said a couple days ago – remains distant. At the same time we have an open mind about all other possible instruments that we may consider proper to adopt. … We stand ready to act again when needed.”
The ECB’s stance is stark contrast to that of the US Federal Reserve who said earlier in June that it will begin to reduce its monetary easing policy as the US economy improves. Confidence, retail sales and employment are all on the rise in the US, in Europe there have been very few signs that things are improving.
Draghi’s comments over a banking union seem further from reality than ever after European finance ministers failed to agree on how to pay for any further bailouts.
“The ECB has done as much as it can to stabilise markets and support the economy,” Draghi said. “Now governments and parliaments need to do all they can to raise growth potential. Banking Union is essential to ensure that we make permanent the progress made in reintegrating financial markets.”
After this morning’s data releases for the Eurozone the Euro weakened against Sterling.
According to a survey compiled by the GfK institute, a forward-looking consumer climate index for Germany advanced from 6.5 for June to 6.8 for July the best reading for nearly 6 years. The result allowed German stocks to rally by the most for two-weeks but was not enough of an improvement to offset data showing that French GDP contracted by 0.2% in the first quarter of 2013. As the fourth quarter of last year also posted economic contraction of 0.2 per cent France is now officially in a recession.
Current Euro (EUR) Exchange Rates
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3017
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8473
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4019
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6740
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7647
The Pound Sterling /Euro Exchange Rate is currently in the region of: 1.1779
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.7108
The New Zealand Dollar/Euro Exchange Rate is currently in the region of: 0.5934
(Correct as of 11:50 am GMT)