Euro Rises as ECB’s Draghi Surprises Traders Expecting Jawboning
The euro rose as European Central Bank President Mario Draghi expressed optimism about inflation and the economy, surprising some investors who had expected him to do more to talk down the single currency.Draghi was speaking in Frankfurt after the ECB kept its main interest rates on hold, as expected by every economist surveyed by Bloomberg. He predicted inflation would pick up in the second half of this year and improve through 2017 to 2018, while pointing to an improvement in euro-zone financing conditions.“The gain in the euro was a reaction to the ECB’s decision to keep rates on hold and the fact that Draghi has so far refrained from talking about the euro,” said Fabrizio Fiorini, chief investment officer at Aletti Gestielle SGR SpA in Milian, the most accurate forecaster of the euro-dollar rate in Bloomberg’s latest rankings. “He has changed his approach on foreign exchange. Now it’s time for credit easing, not FX easing.”The shared currency reached a session high of $1.1398, a 0.9 percent gain on the day. It was up 0.8 percent at $1.1385 as of 2:15 p.m. London time. The euro was also boosted by worse-than-forecast outlook data from the U.S.