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The euro edged up on Thursday, while the European stocks pulled back as the investors eagerly awaited for the policy statement of ECB chief Mario Draghi after the European Central Bank’s (ECB) monthly meeting amid the ongoing crisis in the eurozone.
The markets were also having a close watch at the signs of more aggressive stimulus by the ECB boss amid reports of internal opposition against his leadership style and long-standing problem over quantitative easing.
The European currency also pushed back above USD 1.25 as a recent sharp rally in the US dollar, mainly against the yen,halted after volatile moves overnight.
“The market feels great. It is a very risk-on mindset set at the moment and if you do get a much more inclusive tone from the ECB and some information on what assets could be bought, we could be off to the races,” said Nick Lawson, Managing Director in Global Markets Equity at Deutsche Bank.
Refuting several eurozone business surveys, European Commission growth forecasts had a big cut, while the Bank of Japan threw surprise last week after it announced enhancing of its massive monetary stimulus. Experts say both the developments have further mounted pressure on the European Central Bank to ease its monetray policy more.
The European currency last traded at USD 1.2515, a two-year low of USD 1.2439 set early in the week. The demand for the eurozone government bonds from Greece to Germany gradually picked up as trading gained momentum.