Euro comes off weekly lows as Draghi speaks

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The euro looks unfazed by the ECB’s rock-solid commitment to QE if inflation stays low.

Speaking in Brussels this afternoon, European Central Bank president Mario Draghi has said policymakers are not concerned over January’s four-year inflation high and that the central bank remains committed to expanding its stimulus programme if inflation remains below its near 2 per cent target.

The euro picked up off a weekly low of $1.0711 hit as Mr Draghi began speaking.

Politics may trump monetary policy for the currency for now; at $1.0725 the euro remains 0.5 per cent weaker on the day. The single currency is particularly vulnerable to political risk at the moment, analysts are warning, with uncertainty over the French presidential elections contributing to the recent decline. All eyes are on a speech due this afternoon from presidential candidate François Fillon, who is under pressure to withdraw from the race.

From SocGen’s Kit Juckes:

Once the French elections are out of the way, there is every risk that the euro rises very sharply, but in the next few weeks we expect it to come under significant pressure.

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