Tag Archives: Mario Draghi

Euro Wobbles On ECB’s Cautious Stance, Dollar Wavers

Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the financial markets:

Main Trading Event Of The Day: CAD Employment Change @ 12.30 GMT

WHAT WE’RE WATCHING TODAY

Euro Wobbles On ECB’s Cautious Stance, Dollar Wavers

The euro was on the backfoot early today after European Central Bank President Mario Draghi struck a cautious note on the euro zone economy. The European Central Bank’s decision yesterday to leave interest rates unchanged was not unexpected, but Draghi said the Ukraine crisis threatened the economy and weakened the euro. The euro traded little changed at $1.3360 after falling about 0.15 percent overnight. The currency which hit a nine-month low of $1.3333 on Wednesday stands to lose about 0.5 percent on the week.

Traders are also watching out for the outcome of the Bank of Japan’s monetary policy meeting later in the day for any cues. While the BOJ is expected to stand pat on policy, a weaker assessment of the economy by policymakers could stoke expectations of further monetary easing and dent the yen.

Draghi Blames Italy As Recession Tarnishes Euro Area

Mario Draghi has blamed Italy itself for its third recession since 2008.The day after data showed the euro-area’s third-biggest economy unexpectedly contracted last quarter, the European Central Bank president singled out his country’s lack of structural reform and the disincentive for investment it engenders. This followed an opening statement regarding the region’s uneven recovery. The comments may increase pressure on Italian Prime Minister Matteo Renzi to turn around an economy with youth unemployment above 40 percent and a recession that threatens the 18-nation currency bloc’s nascent revival. The ECB president’s comments on his homeland were blunter than normal, adding to the contrast with countries such as Spain that have engaged in more structural adjustments.

Gold Climbs To 3-Week High As Iraq Tensions Rise

Gold has advanced to the highest level in three weeks, due to end the longest run of weekly losses since September as haven demand increased on unrest in the Middle East and tension over Ukraine. Bullion for immediate delivery rose as much as 0.5 percent to $1,318.72 an ounce, the highest since July 18. A fourth day of gains would make it the longest rally since June. Fighting in Ukraine and the Middle East helped gold rebound this year from the biggest drop in more than three decades. Gold has risen 1.9 percent this week even though the dollar reached a nine-month high against the euro on signs the U.S. is recovering while Europe’s economy falters. Prices dropped for the previous three weeks. European Central Bank President Mario Draghi yesterday signaled monetary policy will diverge from the U.S. for an extended period of time.

That sums up today’s highlights! Don’t forget to keep in touch via the social media platforms for all the latest trading updates of the day. We hope you have a profitable day on the markets.

Ukraine Likely To Overshadow ECB Meeting

Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the financial markets:

Main Trading Event Of The Day: EU ECB Press Conference @ 12.30 GMT

WHAT WE’RE WATCHING TODAY

Ukraine Likely To Overshadow ECB Meeting

The crisis in Ukraine along with a hesitant recovery in Europe will most probably overshadow today’s European Central Bank meeting. Economists say the monetary authority for the member states who use the Euro will look to reassure markets that it is ready to add more stimulus measures if the economy takes a turn for the worse. It recently approved a major package of measures including a cut in the main interest rate to a record low 0.15 percent and an offer of more extra-cheap credit to banks and is waiting to see how those work. If further measures are deemed necessary in the future, analysts say the bank could decide to purchase large amounts of financial assets such as government bonds in the open market, a step which can drive rates down further and add newly created money to the economy but the bank is only expected to use it if its current efforts don’t work as expected. One risk factor is a sudden shock to business and investor confidence if the conflict between Russia and Ukraine escalates which could lead the EU and United States to impose new sanctions on Russia, disrupting trade. Uncertainty over what the impact could be on the global economy and markets could make businesses hold off on investing and consumers on spending. Low inflation is another worry for the ECB, at only 0.4 percent in the year to July. ECB President Mario Draghi has indicated that asset purchases are possible in the future and is one of the reasons why the euro has been in retreat over the past couple of months. ECB Press Conference is due today @ 12.30 GMT.

German Industry Output Grows Less Than Expected On Russia

German industrial output grew less than forecast in June as Europe’s largest economy came under pressure from political tensions with Russia. Production, adjusted for seasonal swings, rose 0.3 percent from May, when it declined a revised 1.7 percent. While that’s the first increase in four months, economists predicted a gain of 1.2 percent. Production fell 0.5 percent in June from the previous year when adjusted for working days. The European Union agreed last week on its widest-ranging sanctions yet over Russia’s backing of rebels in eastern Ukraine and the Bundesbank has cited geopolitical tensions as contributing to a probable stagnation of the economy in the second quarter. Factory orders fell the most in more than 2 1/2 years in June and sentiment surveys have plunged in Germany, Russia’s biggest trading partner in Europe. There is pessimism in the markets and it remains to be seen whether this pessimism will become persistent.

Australian Jobless Rate Tops U.S. First Time Since 2007

Australia’s jobless rate jumped to a 12 year high in July, overtaking the U.S. level for the first time since 2007 while sending the local currency falling. The unemployment rate rose to 6.4 percent from 6 percent according to the statistics bureau in Sydney, versus estimates for unemployment to hold steady. The number of people employed fell by 300. Australia appears to be losing its developed-world-beating status as the mining investment boom that powered it through the global financial crisis wanes. The number of full-time jobs increased by 14,500 in July, and part-time employment fell 14,800, today’s report showed. Australia’s participation rate, a measure of the labour force in proportion to the population, climbed to 64.8 percent in July from 64.7 percent a month earlier. The Australian dollar was trading at 92.87 U.S. cents at from 93.43 cents before the data were released.

That sums up today’s highlights! Don’t forget you can find us throughout the day on the social media platforms delivering u-to-the-minute news for traders. We hope you have a profitable day on the markets.

ECB Interest Rates Too Low For Germany; Draghi Speaks

Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the financial markets:

Main Trading Event Of The Day: EUR ECB President Draghi Speaks @ 17.00 GMT

WHAT WE’RE WATCHING TODAY

ECB Interest Rates Too Low For Germany; Draghi Speaks

Bundesbank chief Jens Weidmann is reported to have said that the European Central Bank should tighten policy as soon as it can and that its interest rates are too low for Germany, as he referred to tensions in the united front the bank has presented since its major policy shift in June. Weidmann pointed out that many savers in Germany were unhappy with low interest rates but said these were aimed at supporting investment and consumption. The ECB cut interest rates to record lows last month as part of a package of measures to jump-start a sluggish euro zone economy, where inflation is running far below the central bank’s target. The German economy is nonetheless still outperforming other countries in the bloc. Weidmann added that if the Bundesbank were autonomous, Germany would benefit from a tighter rather than a looser monetary policy and warned about the risks of leaving policy loose for too long.

At the monthly news conference, Draghi said risks to the euro zone economic recovery remained primarily negative and left the door open to a possible asset-buying program by the ECB, which Weidmann has cautioned against in all but exceptional circumstances. Weidmann put the onus on governments to act, urging them to shape up their economies and consolidate their budgets as the euro zone recovers from the debt crisis that took it to the brink of break-up. The euro was steady at $1.3604, having wobbled on either side of $1.3600 in the past week. European Central Bank President Mario Draghi is scheduled to give an introductory statement at the quarterly hearing before the Committee on Economic and Monetary Affairs of the European Parliament later in the day.

ECB President Draghi speaks today @ 17.00 GMT.

U.S. Dollar Firms In Subdued Trade; Market Awaits Yellen

The dollar edged up slightly against the yen today as investors awaited events this week including Federal Reserve Chair Janet Yellen’s congressional testimony for cues on the outlook for U.S. monetary policy. Investors also awaited a policy review by the Bank of Japan on Tuesday, though the central bank was widely expected to maintain its policy and its broader economic outlook. The BOJ next week may trim its economic growth forecast for the current year, reflecting soft exports and a bigger-than-expected slump in household spending after a sales tax hike in April, though the change would not tip any policy changes to come. The dollar index edged slightly higher to 80.217, nudging away from a two-month low of 79.740 on July 1. Speculators increased their bullish bets on the U.S. dollar in the latest week, with the value of the dollar’s net long position rising to $10.34 billion in the week through July 8. The total value of positions rose from $8.65 billion the previous week when it was the smallest net long on the dollar in five weeks.

Stock Watch: Guardians Could Open Galaxy Of Riches For Disney

When Disney bought Marvel for $4.2 billion in 2009, its stock sank following news of the acquisition. Analysts warned Disney’s superheroes would have to fight extra hard to win box office dollars. However, under the guidance of Marvel Studios’ President Kevin Feige, the team has been taking more risks and a more character-driven approach to storytelling. So far, it’s paying off. At the time, Disney also inked a landmark deal with Netflix to stream four new and original Marvel series on the platform, starting from 2016. So far, this year has been strong for the Disney/Marvel duo with its latest release, Captain America, dominating at the box office on its opening weekend.

That sums up today’s highlights! Remember to stay in touch for all the latest trading updates of the day - find us on Facebook, Twitter, Google+ and LinkedIn. We hope you have a profitable day on the markets.

Dollar Headed for Best Week Versus Yen Since April Before Payrolls

Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the financial markets:

Main Trading Event Of The Day: U.S. Non-Farm Payrolls @ 12.30 GMT

WHAT WE’RE WATCHING TODAY

Dollar Headed for Best Week Versus Yen Since April Before Payrolls

The dollar headed for its biggest weekly gain since April versus the yen ahead of today’s U.S. Non-Farm Payrolls report which is expected to show that employers added more than 200,000 jobs for a fourth month as the labour market recovers. The euro was little changed today after jumping the most since March versus the dollar yesterday as the market rejected the European Central Bank’s unprecedented effort to weaken the single currency. The dollar was little changed at 102.34 yen having gained 0.6 percent this week, the most since the period ended April 18. The euro traded at $1.3657 after jumping 0.5 percent yesterday, the most since March 6. The Euro was little changed at 139.75 yen.

Meanwhile, the Dow and the S&P 500 ended at a new record on Thursday after the European Central Bank cut rates to record lows and pledged to do more if needed to fight off the risk of deflation. Investors are now focused on today’s U.S. payrolls report for May. It is expected to show job growth slowed last month and the unemployment rate ticked up, but not by enough to upset the view that the economy is bouncing back. The number of Americans filing new claims for unemployment benefits rose last week, but the underlying trend continued to point to a firming labor market.

Draghi Fights Deflation With Banks Rather Than Bonds

The banking system rather than the bond market is Marion Draghi’s chosen route as his best ally, for now at least, in the fight against deflation. The European Central Bank yesterday cut interest rates to unprecedented lows and its president unveiled measures to beef up lending for banks in a bid to revive inflation hovering close to a quarter of his target. With much hinging on whether banks will boost credit themselves, failure to spur consumer prices will leave Draghi with little option but to enter the uncharted terrain of U.S.-style bond buying. Some executives have more hope than confidence that Draghi’s current plan will work. The negative deposit rate is aimed at stemming unwarranted increases in money-market rates and weakening the euro, yet could backfire if banks retrench further or pass the cost on to customers. A risk of the new lending venture is that banks may pass on the money only to find companies can’t repay it which may mean that Draghi ultimately has no choice but to engage fully with QE.

Higher Coffee Prices Hit Consumers

The moment to hoard cheap coffee beans has passed. The price of coffee futures peaked in April and the higher commodity costs are now hitting consumers at the supermarkets. Coffee prices spiked after drought hit the crop in Brazil, the world’s largest grower, even though rains have recently eased some of the damage. Changes in the futures market don’t tend to show up in retail prices for months. In February, Arabica futures rallied by more than 20 percent to start the year. After reaching a high of $2.12 per pound in April, coffee futures prices have since cooled somewhat so there’s hope yet that retail prices will fall again, in time.

That sums up today’s highlights! We hope you have a profitable day on the markets.

Euro Hovers Near Lows As Draghi Speech Awaited

Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the financial markets:

Main Trading Event Of The Day: EUR President Draghi Speaks @ 08.00 GMT

WHAT WE’RE WATCHING TODAY

Euro Hovers Near Lows As Draghi Speech Awaited

The euro touched a new three-month low against the dollar today as investors awaited comments from ECB head Mario Draghi and took on board the results of the weekend elections. Critics of the European Union more than doubled their presence following the elections, as voters registered discontent over immigration, austerity and unemployment. Although it is unlikely that Draghi will say anything new or surprising, his speech will be closely watched for any signals about the ECB’s next steps. The euro has fallen more than 2 percent on the greenback since May 5 against a backdrop of rising expectations that the ECB will ease policy next month, which in turn increased wagers on the common currency coming under pressure. The Euro last traded at $1.3619, down about 0.1 percent on the day. Early in the session, it briefly dipped to $1.3615, a low not seen since mid-February. Against its Japanese counterpart, the euro slipped about 0.2 percent to 138.80 yen. Traders said the policy outlook will continue to be a negative factor for the euro rather than results of the weekend elections.

Gold Steady Below $1,300 As Ukraine Elections Eyed

Gold continued to hover below $1,300 an ounce on today after ending flat for two straight weeks but the metal could gain from developments in the Ukraine where pro-West billionaire Petro Poroshenko claimed the Ukrainian presidency on Sunday. Analysts say the relationship between Russia and the newly elected president in the Ukraine will be key for gold prices. Since the new president is not pro-Russia, it could make Ukraine more divided. There is still a lot of uncertainty and political risk there, which could boost gold’s safe-haven appeal. Spot gold was steady at $1,293.01 an ounce after ending flat for a second straight week. The metal has closed between $1,291 and $1,296 in the last seven sessions. Liquidity is likely to be thin today with U.S. markets closed for Memorial Day and Britain shut for a bank holiday.

Lagarde: Central Banks Should Cooperate On Policy Moves

IMF Managing Director, Christine Lagarde is urging central banks to cooperate on policy moves as the Federal Reserve debates the timing of its first interest rate hike since 2006. Lagarde stressed that in times of distress, the potential gains from cooperation can be huge by reducing the risk of tail events with large international feedback effects. The Fed and the Bank of England are expected to start raising interest rates in 2015. The Fed’s decision to unwind quantitative easing last year threw emerging markets into turmoil, prompting sharp currency and equity market declines in India, Indonesia, Brazil, South Africa and Turkey, and underscoring the impact of Fed policy on global markets. The case for policy cooperation may seem less compelling as urgency fades with the global economy turning a corner and as the gains from cooperative policy responses are unclear but it is precisely this uncertainty that would make us remiss in discounting the gains from cooperation in a post-crisis. Reducing vulnerabilities and reinforcing macroeconomic and financial frameworks should be the order of the day for emerging markets-and indeed for all countries according to Lagarde.

That sums up today’s highlights! We hope you have a profitable day on the markets.

Euro Steadies After Falling On Dovish Draghi Comments

Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the financial markets:

Main Trading Event Of The Day: GB Manufacturing Production m/m @ 08.30 GMT

WHAT WE’RE WATCHING TODAY

Euro Steadies After Falling On Dovish Draghi Comments

The euro struggled to gain traction today after dovish comments from European Central Bank President Mario Draghi sent the currency tumbling from a 2-1/2 year high. The Euro held steady at $1.3839, having pulled back from a peak of $1.3995 on Thursday, the highest since October 2011. Draghi said the euro’s strength was “a serious concern” and that the ECB bank might act to stem falling inflation at its June meeting, signaling possible easing. Before Draghi’s comments, the single currency had surged after the ECB on Thursday kept monetary policy unchanged as expected. Traders say the ECB, which has focused on the euro’s strength in the past few weeks, gets uneasy when the euro rises towards $1.40. A Reuters poll on Wednesday showed most economists expect ECB action if the euro hits $1.42.

The dollar was little changed at 101.70 yen, still not very far from a three-week low of 101.43 yen set on Wednesday. For the week, the greenback is down 0.5 percent against the yen, weighed down by persistently dovish comments from the Federal Reserve and low U.S. Treasury yields. Simmering tensions in the Ukraine have also supported the safe-haven yen currency. The Australian dollar eased 0.1 percent to $0.9364, edging away from a three-week high of $0.9395 hit on Thursday, when it gained a lift from upbeat Australian and Chinese economic data.

European Stock-Index Futures Little Changed Amid Earnings

European stock-index futures were little changed, after the Stoxx Europe 600 Index climbed yesterday to its highest level in more than six years, as investors weighed corporate earnings. U.S. index futures and Asian shares were also little changed. Futures on the Euro Stoxx 50 Index expiring in June declined 0.2 percent to 3,164 at 7:20 a.m. in London. Contracts on the U.K.’s FTSE 100 Index fell 0.1 percent, while Standard & Poor’s 500 Index futures slipped less than 0.1 percent. The MSCI Asia Pacific Index added 0.1 percent. The Stoxx 600 climbed yesterday for the first time in five days, sending the benchmark gauge to its highest level since January 2008, after European Central Bank President Mario Draghi pledged to ease monetary policy next month if needed. Thirteen companies in the Stoxx 600 are reporting quarterly results today. Profits for companies on the Stoxx 600 will climb 8.3 percent this year on average, according to analysts’ estimates. The gauge is up 0.5 percent so far this week, poised for the fourth straight weekly gain.

Gold Steady On Ukraine Tensions But Poised For 2nd Weekly Drop

Gold prices were steady on Friday, supported by geopolitical tensions in Ukraine, but poised to post its second straight weekly decline as more strong U.S. data showed that the world’s largest economy was recovering well, supportive of the Federal Reserve’s stance to keep trimming monetary stimulus. Spot gold was little changed at $1,290.34 an ounce. The metal is down 0.7 percent for the week, its second straight weekly decline. Ukraine tensions have been behind much of gold’s 7 percent rise this year, but traders fear the gains would dissipate quickly once the situation is resolved and on the back of a U.S. economic recovery. Physical demand has also been muted despite the drop in prices, with many hoping that a stabilisation in prices would bring back buyers.

That sums up today’s highlights! We hope you have a profitable day on the markets.

U.S. Unemployment Claims, Mario Draghi Speaks

Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the financial markets:

Main Trading Event Of The Day: USD Unemployment Claims @ 12.30 GMT

WHAT WE’RE WATCHING TODAY

Economic Data…U.S. Unemployment Claims, Mario Draghi Speaks

New jobless claims registered last week remained low at 304,000, near their pre-recession levels, following 302,000 posted in the previous week. Economists predict claims will climb to 315,000 in the week ended April 19 due in part to the Easter holidays where it is usual for claims to rise. Layoffs are reported to be trending lower and hiring is finally starting to gain momentum after being held back by severe weather earlier in the year, with recent jobless claims hitting their lowest levels in almost seven years.

ECB President Mario Draghi is also due to speak at a conference in Amsterdam today. He is expected to comment on the low inflation rate in the Eurozone. Market volatility is expected due to Draghi’s heavy handed approach on the euro.

Apple Earnings Drive Stocks

Apple impressed investors with a big earnings beat on Wednesday evening as well as another big stock buyback and a dividend hike. Shares jumped 7.8 percent in afterhours trading and are expected to boost sentiment on Wall Street. The stock shot up more than 8 percent in after-hours trading to $567.50. Apple Chief Executive, Tim Cook said the company chose to expand its stock-buyback program by $30 billion because it views its shares as undervalued. The company said it would boost the overall size of its capital return program to more than $130 billion by the end of 2015, up from its previous $100 billion plan. After more than a decade of remarkable earnings growth, the technology giant’s revenue and profit are flattening and the company is fighting the perception that its best days are behind it. Apple said net income was $10.22 billion in its fiscal second quarter ended March 29 versus $9.55 billion in the year-ago period. Revenue rose to $45.6 billion from $43.60 billion in the same period a year earlier. Apple’s earnings per share rose to $11.62 from $10.09, because the company’s stock repurchase program decreased the pool of total shares. Analysts, on average, estimated that Apple would post earnings of $10.18 per share on revenue of $43.53 billion.

European shares are also set for a higher open today on the back of Apple’s earnings. The FTSE is called up 18 points at 6,693, the German Dax is seen higher by 46 points at 9,590 and the French CAC is seen up 19 points at 4,470.

Gold Edges Up On Ukraine & U.S. Housing Data

Gold edged up today but held near a more than two-month low, dimming its appeal as an alternative investment. Bullion for immediate delivery rose as much as 0.3 percent to $1,287.08 an ounce, and traded at $1,287.06 at 11:40 a.m. Prices fell to $1,277.69 on April 22, the lowest level since Feb. 11. Gold has rallied 7.1 percent this year, rebounding from the worst annual drop in more than three decades as unrest in Ukraine, a rout in emerging markets and concern that the U.S. recovery may be losing momentum fueled demand. Investors are now waiting for the release of U.S. jobless claims and durable goods orders data for clues on the health of the world’s largest economy ahead of next week’s meeting of the Federal Reserve Open Market Committee on interest rates.

That sums up today’s highlights! You can find all the latest daily trading news and developments via our Facebook, Twitter, Google+ and LinkedIn pages. We hope you have a profitable day on the markets!

Just A Minute!

Here’s today’s ‘Just A Minute’ bringing you a 60 second summary what’s happening in the markets today:

Main Trading Events Of The Day: ECB President Draghi Speaks @ 15.30; BOE Gov Carney Speaks & Inflation Report @10.30 GMT

Earnings Reports: N/A

WHAT WE’RE WATCHING TODAY

Stocks Rise Along With Gold On Yellen’s Comments

U.S. stocks surged with the Dow Jones Industrial Average rising triple digits and the Nasdaq Composite turning positive for the year, as Federal Reserve Chair Janet Yellen reassured Wall Street that the Fed would continue the central bank’s policy of providing monetary stimulus to bolster the economy and expected “a great deal of continuity” with the monetary policies of her predecessor, Ben Bernanke. The House voted to suspend the nation’s borrowing limit until March 2015, without any policy conditions. This was a positive move for the markets because previous debates on U.S. government spending have weighed on global markets in the past, in particular, the budget impasse late last year that resulted in a government shutdown. Asian markets also moved higher after Yellen suggested that there would be no major change in the central bank’s policy, while stronger-than-expected trade data pushed Hong Kong higher. Gold bullion also gained again in trading today following Yellen’s testimony. The Fed is now buying $65 billion in bonds each month to stimulate the economy, down $20 billion from its 2013 pace. Many gold bugs predict inflation will follow the central bank’s accumulation of a $4.1 trillion balance sheet.

ECB’s Draghi Speaks; Will Deflation Be On The Agenda?

ECB President Draghi will deliver the keynote address at a conference in Brussels today. Euro-zone industrial output fell a seasonally adjusted 0.3 percent in December compared with a gain of 1.8 percent in the previous month. All eyes will be on Mario Draghi and any indications about economic measures that the ECB is likely to impose in order to beat deflation. The ECB may soon have to roll out the heavy artillery, in the form of an asset purchase program similar to those in the U.S., U.K. and Japan to fight the specter of deflation. Despite substantial progress over the past year, the euro-area economy remains vulnerable. Spare capacity and weak growth, along with relative price cuts by countries trying to restore competitiveness, is putting severe downward pressure on inflation. Bank of England Governor Mark Carney also releases an inflation report today where he will seek to cement investor expectations that the next increase in interest rates is some time away when he presents an updated version of his forward-guidance policy. Yields suggest Carney has convinced traders that there is enough slack in the economy to maintain the benchmark rate at a record 0.5 percent this year.

Will Apple’s Sapphire-Screen iPhone Be Here Soon?

The latest rumours surfacing about Apple’s plans to manufacture sapphire are the most credible foundation yet for speculation that the iPhone will one day soon boast the most scratch-resistant screen on the planet. It’s not yet clear if the next-generation iPhone would get such a sapphire screen, or if the world will have to wait until 2015, presumably for an “iPhone 6s” model. Some are even claiming that it will be the iWatch that will be the first Apple device to be equipped with the scratch-resistant material. If the latest sapphire tech rumour is true, Apple’s exclusive manufacturing partner, GT Advanced Technologies, is gearing up its Arizona manufacturing facility with enough furnaces to forge as many as 200 million iPhone displays. The price of sapphire will inevitably result in driving up the retail price tag of the iPhone. A price increase could be detrimental to Apple as the iPhone already has a premium price tag. One to watch!

That sums up today’s highlights! Keep checking in for all the latest trading news via Facebook, Twitter & Google+. We hope you have a profitable day on the markets!

Can Mario Draghi Celebrate Euro Victory Yet?

If there’s one man that can celebrate a fresh start in the new year, that certainly seems to be Mario Draghi.

The European Central Bank president had taken a bold stance during a London speech in July 2012 when he declared that he would do “whatever it takes” to save the Euro. Despite disbelief and opposition, even from within Euro-zone member states such as, most notably, Germany, Draghi seems to have proven himself good for his word.

The crisis that brought the purpose of the euro into questions and had many questioning its survival, appears to have been dissipated. Draghi has been praised even by some of his harshest critics, such as Nobel-laureate Paul Krugman and economist Nouriel Roubini for revitalizing the euro.

Krugman, in fact, admitted that “Draghi did the most of it,” and said it was “pretty clear that the ECB has been decisive in alleviating the European situation.”

So where can positive results be seen? Ireland put bonds for sale this week for the time after exiting the IMF’s support programme of three years. Portugal and maybe even Greece are expected to be able to follow suit soon enough. In Spain, moreover, yields on 10-year government debt fell the most since 2009. The Stoxx Euro 600 Index climbed to its highest peak in nearly five years, while the euro advanced the most against the dollar in nearly three years.

Reduced budget cuts and increased retail sales data this week seem to signal the beginning of the end for the longest recession in the short history of the euro. And just to prove wrong anyone who predicted that the euro would spit up now, Latvia joined the currency moving it from a 17- to an 18-nation shared currency.

Euro on a Seven-Day Advance Before Draghi’s Speech Today

The euro has returned to old glories, albeit perhaps momentarily, as it sustains a week-long rally against the dollar matching its best performance since April 2011 before the speech of European Central Bank President Mario Draghi speaks in the European Union parliament today.

Data scheduled for today are expected to show an upturn in the industrial production of the euro-area and positive sentiment kept the currency trading near a six-week high. U.S. data, however, are also expected to show growth and the greenback ended a two-day decline against the yes as investors consider the possible impact of next week’s Federal Reserve meeting.

The euro remained fairly stable at $1.3784 yesterday and touched $1.3877, its strongest level since 29th October. The seven-day advanced matched its longest streak since an eight-day gain in April 2011.

The ECB refrained form changing interest-rates targets this month and President Draghi, who speaks at the European Parliament today, noted two days ago that it’s “crucial” for “other actors” to support the central bank’s monetary policy actions by effecting appropriate changes at the regional and national level for a sustainable recovery.

“The ECB, like all central banks, should not try to do what they cannot do and one of these is to supplement governments for structural reform action or repair broken banking systems,” he said in Rome.

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