Markets ignore ECB’s dovish comments
Insistence that asset buying could be expanded overshadowed by tapering expectations
Following a dovish policy announcement released by the European Central Bank after their Thursday meeting, investors pounced on later comments from President Mario Draghi, which sent the euro up above 1.55 against the dollar, after an earlier fall to 1.1.48, reports CNBC.
Rates were held at 0.00%, for the seventeenth consecutive month, and the announcement attempted to calm markets expectations of tapering with a comment that the bank was ready to expand size or duration of bond purchases, if necessary.
“If the outlook becomes less favorable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation, the Governing Council stands ready to increase the program in terms of size and/or duration,” the ECB said in its policy announcement alongside its rate decision.
But during a press conference Draghi later spoke of signs that inflation will continue and that ECB members would indeed debate bond purchases in September, confirming expectations of movement, albeit slow, toward tapering of stimulus.