At the Jackson Hole symposium for central bankers which was held this past weekend in Wyoming, markets anxiously watch for any signs that Mario Draghi was prepared to let loose ammunition which would bring the Euro lower. Super Mario, as he is often called by currency traders, failed to talk down the appreciating Euro which allowed the common currency to reach a 2½ year peak versus the US Dollar. The greenback was under some broad pressure as a result of worries as to how Tropical Storm Harvey might impact the US economy, especially given the prevalence of oil refineries on the Texas shores.
As reported at 11:26 am (BST) in London, the EUR/USD was trading at $1.1935, a gain of 0.10%; the pair had earlier hit a peak of $1.1966, the highest price since January 2015 while the session low stands at $1.19150/. The EUR/GBP was lower at 0.9254 Pence, down 0.04%.
Market to Focus on September ECB Meet
Though Draghi did not say anything specifically that would weaken the Euro, analysts say that the markets will turn to September’s meeting of the ECB’s Governing Council which could announce a reduction of the ECB’s QE scheme. One currency strategist in Tokyo says that the ECB is likely to intentionally taper its purchases of Euro area bonds, especially given that available bonds from Germany are running out while Italian bonds could test ECB capital limits.