Fundamental Comment

ECB Draghi: Inflation uncertainty receding, trade protectionism prominent

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European Central Bank President Mario Draghi started by the press conference by revealing that the latest data has stabilized in line with forecasts and point to ongoing growth.

Risks to the growth outlook remain broadly balanced, but ample degree of monetary policy still needed, said Draghi.

Global uncertainty and the threat of trade protectionism are prominent, while risks of financial market volatility remains elevated.

Regarding inflation, Draghi mentioned it has remained muted but it will rise gradually over the medium term while pick up toward the end of the year.

Uncertainty about euro area inflation outlook is receding.

“The Governing Council expects the key ECB interest rates to remain at their present levels at least through the summer of 2019, and in any case for as long as necessary to ensure the continued sustained convergence of inflation to levels that are below, but close to, 2% over the medium term,” the ECB statement said.

He stressed that the exchange rate is not a policy target, revealing that the euro has appreciated considerably over past 12-18 months.

As of 13:10 GMT, the euro traded lower at $1.1692 after falling to a bottom of $1.1685.

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