Trump hits out as ECB's Draghi urges governments to spend more - business live | Business

Trump hits out as ECB’s Draghi urges governments to spend more – business live | Business

Business News

Although Draghi has done “whatever it takes” before he hands the mantle over to Christine Lagarde, it seems markets are disappointed with the ECB’s actions. Given the concerns revolving around the health of the Eurozone economy, most were expecting Draghi to launch a monetary policy bazooka before his departure.

However, the argument for the ECB saving some ammunition in the monetary policy toolbox could be for when economic conditions worsen. It is worth keeping in mind that the Eurozone is not only dealing with developments at home, but risks in the form of Brexit and Trump imposing tariffs on European goods. With the ECB cutting its growth forecasts for 2019 and 2020, there is potential for further easing down the line should global and domestic economic conditions deteriorate further.

The Euro collapsed like a house of cards following the rate decision with prices crashing towards $1.0930 against the Dollar before later recovering over $1.1000. Further weakness may be on the cards in the near term as investors digest the ECB’s action and prospects of further easing in the future.


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