Draghi defended the ECB's policy of aggressive bond buying and ultra-low rates from accusations that it has led to growing inequality and a shift of financial income from stronger to weaker economies. But he also acknowledged complaints by banks, particularly in Germany, that low rates are eating into their profits.
Draghi's comments were likely to further lengthen the odds on another cut in the ECB's deposit rate of -0.40%.
Speaking almost simultaneously at a separate event, German Finance Minister Wolfgang Schaeuble said there was a growing international consensus that had reached its limits.
The focus will be on U.S. third-quarter growth data to be released on Friday. The rebound in US growth from 1.4% in the second quarter 2016 to 2.6% in annualized terms will likely confirm market expectations for a Fed rate hike in December. The market was pricing in a greater than 78% chance that the Fed would raise rates in December.
The EUR/USD recovered after yesterday’s comments from Draghi. We opened EUR/USD long at 1.0905 today in the morning of the European session. We expect a recovery to 1.1035, near October 20 high.
GrowthAces.com - Daily Forex Trading Strategies