Speaking at the ECB's annual policy forum, Draghi highlighted a recovering euro zone economy that “the threat of deflation is gone and reflationary forces are at play” and that that the effects that keep inflation subdued are temporary and won’t let inflation deviate from its trend over the medium term. but added that stimulus in the form of the ECB's monetary support was still needed.As Reuters adds, Draghi's comments "sounded to investors like he was ready to give more ground on German demands that the ECB get on with starting to reduce the volume of extra euros it is feeding mont hly into the economy."
Euro higher on hawkish Draghi comments
The euro surged to its highest in two weeks after Mario Draghi, speaking at the ECB forum in Sintra, Portugal, surprised markets who expected yet another dovish speech from the central banker, who instead signaled that stimulus tapering may be closer than the market anticipated and said factors weighing on inflation in the euro zone were "mainly temporary" and the central bank could look through them.
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