09/12/16 - Draghi Extends QE

EUR

Yesterday afternoon the Euro lost ground when European Central Bank president Mario Draghi extended their mammoth money-printing programme until December 2017, after originally being scheduled to finish in March.

The current Quantitative Easing programme pumps an extra €80bn into the Eurozone each month which will be reduced to €60bn from April until the programme ends. Draghi promised to amend the programme if the outlook for the Eurozone changed at any point throughout tis duration.

With still no sign of a sustained rebound in underlying inflation and heightened political risk from looming elections in four of the euro zone's five biggest economies, the ECB promised to keep borrowing costs depressed longer than expected. With elections looming in France, Germany, the Netherlands and possibly Italy, and all facing strengthening populist movements, analysts believe the ECB cannot afford to ease back on the accelerator.

USD

The Dollar strengthened yesterday afternoon after figures revealed fewer Americans signed up for unemployment benefits last week, another sign the US job market remains healthy. Weekly claims for jobless aid slid by 10,000 to a seasonally adjusted 258,000. Overall, 2.01 million Americans are collecting unemployment checks, down 10 percent from a year ago.
 
The low numbers suggest that employers are hanging onto their workers and that most Americans enjoy job security. The unemployment rate is currently at a nine-year low 4.6 percent.

Key Announcements

15:00 – USD – Prelim UoM Consumer Sentiment