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Forex Market News

ECB president Mario Draghi gives a speech this afternoon

Source: ACFX Forex Broker

This afternoon, the Economic and Monetary Affairs meeting in Brussels welcomes ECB president Mario Draghi with the speech for the second time this year. This time Monetary Dialogue will focus on the present and future trends of the European Union Economy.

This Monetary Dialogue has two main topics of discussion. First of them will is named “ECB Quantitative Easing: What are the side effects?” will be discussed during the first part of the presentation. “Sovereign bond purchases and risk sharing arrangements: Implications for euro-area monetary policy” topic will be examined during the second part.

The repercussions of the recently applied Quantitative Easing programme will be paid close attention to at the opening of the meeting. In order to relieve the current state of the declining economy, European Central Bank continues with the massive purchase of the EU government’s securities with the total amount planning to be equal to 1.1 trillion euros by the end of this year. However, there are some downside effects which should be paid close attention to with the scope of their minimization. It has been argued that one of the main topics is that the programme increases the inequality gap.

Sovereign bond purchase programme and risk sharing arrangements will take a priority in the second part of the evening. The deflation of the European economy cause serious concerns to the markets, therefore throughout consideration should be given to the current monetary policy. The current interest rate is already at the lows, however since the state of the economy is still far from the rebounding, the next increase of the rate seems not to be made before the beginning of next year.

However some hints on the timing of the future rise may be given, therefore high markets volatility is often experienced during Mario Draghi speeches. The outlook better than expected will likely play positive effect on the common European currency.

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