Monday 20 November 2017

Euro up on bets ECB to scale back QE

The German share price index, DAX board, is seen at the stock exchange in Frankfurt, Germany,
The German share price index, DAX board, is seen at the stock exchange in Frankfurt, Germany,

Hilary Russ

The euro surged yesterday after the European Central Bank indicated it was preparing to scale back its stimulus programme, while gold rose to a one-year high after the US dollar tumbled on weak US jobs data.

Traders were left waiting after the ECB's initial statement from its policy meeting reaffirmed its ultra-easy stance, but leapt on the euro as ECB head Mario Draghi said the central bank was looking at how to wind down its €60bn-a-month buying programme. The bank kept its growth and inflation outlooks unchanged.

The euro jetted to a nine-day high of $1.2059. It was last up 0.86pc at $1.2018.

"Policy makers are concerned about the strong and rapid appreciation that the currency has experienced," said Craig Erlam, senior market analyst at Oanda in London. "The failure to make a new high is a sign of an overheated market."

Key world stock markets climbed, while European stocks saw their day's gains halved at the prospect of ongoing euro strength.

The pan-European FTSEurofirst 300 index rose 0.25pc and MSCI's gauge of stocks across the globe gained 0.33pc.

The price of gold rose to a one-year peak after the dollar tumbled on the back of weak US jobs data and unchanged expectations for growth and inflation from the European Central Bank.

Markets also benefited from relief that US Congress struck a deal on the country's debt limit and that there had been no further ratcheting up of the North Korea crisis in Asia.

However, stocks fell after a flat start with Hurricane Irma on track to hit Florida by the weekend. The Dow Jones Industrial Average fell 40.59 points, to 21,767.05. (Reuters)

Irish Independent

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