Daily Afternoon Report 07.09.2017

The euro rallied against the dollar on Today after European Central Bank’s President Mario Draghi indicated that a decision on tapering the bank’s bond buying stimulus program would be taken in October.

EURUSD hit a high of 1.2059 and was at 1.2032

Draghi said that the ECB will decide on the “calibration” of its policy beyond 2017 later this year. He added that the bulk of the decisions about the asset purchase program will be taken in October.

The comments came at the bank’s post-policy meeting press conference.

Draghi noted that the ECB is watching the euro’s volatility carefully, as it is a source of uncertainty.

He said the outlook for the euro zone economy is “broadly unchanged”, adding that a “broad-based” recovery is underway across all countries and sectors.

Despite the recovery, the euro zone still needs a “very substantial degree of monetary support”, Draghi said.

He sounded a cautious note on inflation, saying that core inflation has yet to show a convincing pickup and that headline inflation could turn negative towards the end of the year.

The ECB has raised its growth forecast for 2017 and 2018, but cut its inflation forecast for 2018 and 2019.

The euro was also higher against the pound and the yen, with EURGBP climbing to 0.9185 and EURJPY advancing.