Published On: Fri, Aug 25th, 2017

POUND LIVE: Sterling rises amid fears for the euro ahead of Draghi's Jackson Hole speech


Sterling lifted to around 1.0865 against the euro, as the eurozone currency was hit by nerves over the appearance of Mr Draghi at the gathering of central bankers in Wyoming. 

Markets are looking for the ECB chief to give hints about the future of the eurozone’s massive money-printing programme.

The euro has surged in recent months amid expectations the so-called Quantitative Easing programme will soon be scaled back.

However, the stronger currency is problematic for monetary policymakers.

And it’s now expected Mr Draghi will try to dodge talking about policie when he speaks at Jackson Hole at around 7//8pm British time. 

David Madden, market analyst at CMC Markets UK, said: “Traders will be paying close attention to the speeches from Janet Yellen and Mario Draghi, which are due to take place today.
 
“To borrow an expression from the music industry, it is fair to say that Mr Draghi is the ‘headline act’.

“We were told by unnamed sources from the European Central Bank (ECB),that Mr Draghi will not be laying down the groundwork for the tapering of the stimulus package.
 
“The ECB chief will probably use the speech to congratulate himself on the recovery of the eurozone thanks to the loose monetary policy, but he might use the relatively low inflation rate as an excuse not to talk about reigning in the stimulus package.
 
“The ECB are buying €60 billion worth of government bonds per month, and traders know full well the central bank will run out of bonds to buy.

“The ECB will have to come up with alternative ways to keep the policy loose, because a weak euro will assist the eurozone.”

More to follow…


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