ECB Chairman Mario Draghi, remains upbeat about the euro recovery, citing low interest rates, good economic growth and strong bank lending to spearhead the recovery process. His hawkish comments encourage the euro gains “All the signs now point to a strengthening and broadening recovery in the euro area. Deflationary forces have been replaced by reflationary ones,”. Draghi also has commented on inflation talks, remains cautious and indicated that its rate policy may not move in tandem to economic recovering.
Markets was relieved as the euro has recovered slightly against the greenback heading to month end. The euro markets reacted to his speech as the euro rising against most major currency pairs, the EURUSD is now trading at weekly highs $1.124.
Federal Reserve Chairwomen Janet Yellen will deliver a speech today, markets expect her to give a more details to where the US economy is heading towards. Rumours for another interest rate hike maybe on the cards later this year. The fed funds rate is now set at 1.25%. Economists believes that the proposed rate hikes will stimulate the economy furthermore. She remains confident that she will finish her full term as Fed head which finishes in Feb 2018. The dollar waits for more clarity into the latest inflation progress.