Fundamental Comment

Draghi: Growth to remain solid, warns against protectionism


European Central bank President Mario Draghi started his conference by confirming the central bank will hold interest rates at the current levels for an extended period of time. 

Draghi stressed the ECB will hold its monthly bond purchases programme until September this year or beyond if necessary.

Draghi also point out that European economic growth seems to have moderated broadly recently, yet he added that growth is expected to remain “ solid and broad-based.”

He warned that rising trade protectionism could hurt euro area recovery, referring to the U.S. President Donald Trump's trade conflict with China.

"Risks related to global factors, including the threat of increased protectionism, have become more prominent," he said.

The euro zone's economy is showing strength and stability that is driving the bank's confidence to see inflation reaching the target, but in the medium-term concerns remain, which may keep inflation below 2% during this period.

The ECB continues to monitor developments in the movements of the euro and financial markets in general, and to calculate the impact on the future inflation, which prompts the bank to maintain its stimulus program to ensure the continued recovery of inflation.

As for the euro levels, it was very volatile during Draghi's talk, but it managed to rise from a 2-month low and recorded a day high against the dollar at 1.2209 after opening today's session at 1.2160.

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