Do you know that feeling when you are so cool that your word pushes one of the major currencies up? We are talking about ECB President Mario Draghi. Market participants always devour every word of the ECB head during his official speeches.
In the course of the press conference following the results of the annual ECB forum, Draghi said that there is a possibility of adjusting the current monetary policy. Primarily, he was talking about the key interest rate and the quantitative easing program, stating that these instruments can be revised since the European economy expanded noticeably. In other words, the rates can be raised, and the budget allocated for the purchase of bonds can be cut. Of course, there is no strict schedule, but it is clear that even if there are any changes in the nearest future, they will be introduced gradually. However, this news was enough to boost growth of the single European currency. Shortly after the speech of the ECB President, the euro jumped by 1 percent against the US dollar, later reaching a 14-month high.
According to many experts, there is more to come. HSBC currency analysts stated that the fact that the ECB less worried about deflationary pressures is a sign that the bank will be gradually abandoning the stimulative policy. Since the market expects the ECB to wind the quantitative easing program down, the euro will receive additional support, even if the winding down is a long and complex process.
