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Draghi: "exchange rate is not a policy target"


  • Draghi begins press conference in Frankfurt
  • Earlier ECB kept all rates and QE unchanged
  • Euro moving higher and DE30 coming under pressure

ECB president Mario Draghi has begun his press conference in Frankfurt following the earlier announcement that all rates would be kept unchanged and that QE would run until December 2017 or beyond if necessary. The policy statement was very similar to the prior release but there have been several comments which have caught 

Selected comments are shown below:

  • Medium term outlook broadly unchanged
  • Saw higher than expected acceleration in economic growth in H1
  • Confident inflation will return to target
  • Autumn to decide on calibration of policy beyond 2017
  • Exchange rate is not a policy target

The Governing council have also released there latest growth and inflation forecasts. 

Economic growth forecast:

2017 2.2% (fastest since 2007) from 1.9%

2018 1.8% (unchanged)

2019 1.7% (unchanged)

Inflation forecast:

2017 1.5% (unchanged)

2018 1.2% from 1.3% prior

2019: 1.5% from 1.6%

The key points here are the increase in the growth forecast for the present year to its highest level since 2007 as well as the minor downwards revisions to the inflation forecasts. 

In terms of market reaction the Euro has rallied with the EURUSD moving back above the 1.20 handle. The DE30 has come under a little selling pressure with the market falling back to test 12300



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