Euro wobbles on new hint of end to easing

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The central bank's latest decision on monetary policy is due at 13:45 CET and ECB President Mario Draghi will speak at a press conference at 14:30 CET.

However, the statement omitted any mention of the commitment to increase the size and duration of the programme if the economic outlook was to worsen.

But Mike Bell, global market strategist at J.P. Morgan Asset Management, said that due to solid economic growth and an expected fall in unemployment across the eurozone, "the European Central Bank are likely to feel comfortable ending QE in September". The economy is now doing better, but the bank has moved cautiously in ending its crisis measures for fear of roiling recently volatile financial markets.

The single currency was trading at $1.24 on Thursday, a touch below a three-year high hit last month.

The German DAX is set to climb the most at Thursday's open, seen up 23 points at 12,268. During this time the euro has gained 17.5% against the USA currency.

Eurozone countries enjoy the strongest economic growth in a decade.

Trump on Thursday afternoon is expected to sign off on its tariff plan, White House National Trade Council director Peter Navarro told broadcaster Fox Business on Wednesday.

"An escalation of trade wars would lead to greater political uncertainty and a weaker USA dollar".

Draghi said the immediate economic impact of the tariffs would be small.

Euro wobbles on new hint of end to easing
Euro wobbles on new hint of end to easing

"Talk of greater available slack and the clear easing of inflation pressures has taken the pressure off the committee to act, and with a typically dovish Mario Draghi allowed to maintain an accommodative stance going forward, today is clearly a case of taking with one hand and giving with the other", he wrote.

Mr Draghi is also likely to face questions on recent stock market volatility and the prospect of a trade war.

"The most important signal [from the ECB] we will be watching is that the overall path towards policy normalisation remain intact".

"In this context (of subdued underlying inflation), the Governing Council will continue to monitor developments in the exchange rate and financial conditions with regard to their possible implications for the inflation outlook".

Though the European Central Bank dropped its pledge to increase its bond buying if needed, comments by President Mario Draghi that policy would remain "reactive" and that measures of underlying inflation were still subdued weighed on the euro, which in turn benefited Europe's exporter stocks.

Most euro zone government bond yields fell 2-5 basis points, though the yield on Germany's 10-year government bond, the benchmark for the region, rose off session lows of 0.647 percent to trade at 0.65 percent by 1700 GMT - more or less flat on the day. The euro also lost 0.1 percent from 0.88921 to 0.8918 against the pound. Draghi's predecessor, Jean-Claude Trichet, attempted to lift interest rates in 2011 but the bank quickly had to reverse course as the economy fell into recession.

Half an hour before the close of trade on Thursday, the EuroStoxx 50 was up 1.05% at 3,415.

Gold dropped 0.4 percent at $1,320.68 an ounce.

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