During the conference in Hague, German Chancellor Angela Merkel said that the EU would find a backstop solution by October 31 (Brexit deadline).
Common currency reverses revenues
On Thursday, the common currency reversed revenues after European Central Bank President Mario Draghi dared to downplay a decision to drop a promise to expand its quantitative easing initiative from its rate statement.
The currency pair EUR/USD demonstrated an outcome of 1.2392 having initially soared to a peak of 1.2446.
The common currency initially rallied after the ECB shockingly dropped its promise to extend its stimulus initiative if required from its rate statement. The EU’s major financial institution explained this move by the fact that the bank is actually getting closer to ending its huge monetary stimulus program.
Draghi told that the very promise to extend its quantitative easing program had been added to the financial institution’s rate statement in 2016, but at that time the situation had nothing common with what the ECB is facing today.
The decision to have the easing bias on QE dropped turned to be unanimous, as Draghi revealed.
Additionally, he stressed that the European Union’s major bank maintained its promise to proceed with its asset purchase program until September this year or even beyond, if required.
In December, the ECB updated its surge estimates upwards for this year from 2.3% to 2.4% and left its surge estimate for next year and 2020 intact at respectively 1.9% and 1.7%.
Draghi drew attention to the fact that surge could be threatened by a number of downside risks, such as protectionism.
The EU updated downwards its inflation estimates for next year to from 1.5% to 1.4%. The financial institution expects inflation to hit 1.4% this year and also 1.7% in 2020.
The common currency also pared back profits versus the Japanese yen and the British pound, with EUR/JPY last seen at 131.50, sliding from a maximum of 131.98 as well as EUR/GBP caught at 0.8930.
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