According to Mario Draghi, President of the European Central Bank, the Eurozone should have taken steps towards economic recovery before the end of the year.
Although poor economic data resulted in the central bank slashing its benchmark interest to a new record low last month, with the implication that a further cut will be considered if data fails to improve, Draghi remains somewhat confident of positive progress being made in the months ahead.
During a speech in Shanghai Draghi asserted: ‘There are a few signs of a possible stabilization. Our baseline scenario continues to be one of a very gradual recovery starting in the latter part of this year. […] The drivers of such a gradual recovery are the highly accommodative monetary policy and export growth, caused by growing foreign demand.’
When speaking of the banking sector Draghi stated: ‘It is – first and foremost – the responsibility of shareholders to ensure that their bank is solvent and able to sustain its core business. And if the private sector is unable or unwilling to provide the capital necessary to achieve solvency, it is for the fiscal and regulatory authorities to decide whether and how to act.’
The Euro is likely to experience movement today in response to the release of several pieces of influential data for the Eurozone, including manufacturing PMI for Germany and the Eurozone. Already today Italian manufacturing PMI has exceeded expectations, rising from 45.5 to 47.3 in May, better than the increase to 46.2 expected.
The ECB will meet on Thursday and announce its rate decision. Although unemployment in the Eurozone was recently shown to have hit a fresh record high, the majority of economists are forecasting that the central bank will hold rates at their current level for the present.
Euro (EUR) Exchange Rates As of 08:50 –
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3018 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8540 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.3523 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6379 >
