ECB’s Draghi says ‘more optimistic’ on the outlook for the eurozone

NOK – a disappointingly low CPI today rips NOK for further losses and sees EURNOK suddenly poking at the range high stretching back to last fall and the 200-day moving average at 9.12. But Mnuchin, who is ultimately responsible for foreign exchange policy, has yet to make any formal statements on the subject, beyond a boilerplate defense of the “long-term strength of the dollar” during his Senate confirmation hearing. The government did, however, significantly upgrade its growth forecast for the coming year from 1.4% to 2%. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. Prior to this decision, economists and analysts are unanimous of their projections that Europe’s central bank will keep the interest rate dovish. While the fundamentals of Europe have displayed signs of improvement with even inflation hitting the 2% target, the uncertainty revolving around the elections in France and Netherlands continue to limit gains on the Euro.

All in all, there was no meaningful change in the monetary policy outlook of the European Central Bank as Draghi reiterated once more that “a very substantial degree of monetary accommodation is still needed” to push inflation sustainably towards its target, whilst also stating that the commitment to buy assets at a pace of €60bn a month until at least December 2017.

Another report from the statistical office showed that producer price inflation spiked to 7.8 percent, the fastest since 2008, from 6.9 percent in the previous month and exceeded the forecast for 7.7 percent.

Eurozone data has been mixed recently – Manufacturing and Services PMI’s have risen, as has inflation and employment, but other data has fallen, notes Kathy Lien, managing director of BK Asset Management. Eurozone data has been sparse so far, only showing a slight rise in Dutch inflation in February. Investor confidence in Europe’s single currency area has risen to its highest level since August 2007 while economic output last month expanded at its fastest pace in almost six years.

Sources told Reuters some European Central Bank rate-setters had raised the possibility of hiking rates from their current record lows before the end of QE, but that the discussion was brief, and there was not broad support for the idea.

“Mario Draghi will most likely talk down the currency, which could erase any earlier gains”. Fluctuations in energy prices like the one seen today where oil dropped more than 4 percent after an increase of US inventories was announced limit the positive growth of inflation in the European Union.

Resistance for EUR/USD still stands at the 1.0640 level, which was tested on Monday and failed.

It said global gross domestic product was expected to “pick up modestly” to around 3.5 percent in 2018, from just under 3 percent in 2016.

If the European Central Bank is looking for signs of sustainable growth then housing is normally a useful early indicator of economic growth.

Writing last week, the team said: “We expect Mario Draghi to acknowledge that the downside risks to the economic outlook have ebbed in recent weeks, but partly thanks to the upcoming elections, he will probably stress that the overall balance of risks is still tilted to the downside”.