Rollercoaster ride for euro as Draghi denies bond-buying speculation
The euro leapt up and then crept down this afternoon in a mini-frenzy of trading as European Central Bank (ECB) President Mario Draghi failed to provide any clues about the outlook for Eurozone monetary policy.
As the ECB held its negative interest rates and quantitative easing (QE) programme unchanged, Draghi said there was no talk of either extending, winding down or ending the €80bn a month package.
The QE programme is scheduled to finish in March 2017, and markets are keen to find out exactly how, if and when Draghi intends to change course. Draghi today said "an abrupt ending to bond purchases" was "unlikely", though he left markets scratching their heads as he failed to provide any more details.
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Draghi said "there was no discussion" about either "tapering" or "extending" QE at the most recent meeting. During the course of a 15 minute spell, the euro leapt half a cent against the dollar to $1.1020 as Draghi first said the bank was not looking at an extension. The single currency then settled back down to exactly where it started after he clarified than an end to the programme had also not been discussed.
Reports earlier this month suggested the bank had conversations around the idea of tapering – gradually reducing the amount of monthly purchases from March onwards – although this was also staunchly denied by Draghi, who said the news came from somebody "who had no clue" what was going on inside the ECB.
The ECB is widely expected to announce its plans for the future of QE at its next meeting, scheduled for 8 December.