Draghi’s statement is less dovish
ECB (European Central Bank) chief Mario Draghi appeared less dovish in the post monetary policy press conference. The press conference started 45 minutes after the monetary policy statement. Draghi failed to provide a strong signal to a possible hike in the September meeting despite the repeated queries posted by the press.
Regarding the impact of the Brexit vote, Draghi thinks that the initial figures of a growth slowdown by 0.2%–0.5% in Europe due to the event should be taken cautiously given that the real impact of the Brexit vote isn’t known yet. Draghi commented that the preparations taken by the central banks helped provide resilience to the financial sector.
In regards to making changes to the asset purchase program, Draghi said that the ECB thinks that it’s too early to assess the need for fresh stimulus. The council will look into any changes in the September meeting.
Euro posts strong gains after the press conference
The euro had been relatively flat ahead of the press conference. It rose from a low of 1.005 to a high of 1.060. The rise in the euro was primarily attributed to Draghi’s press conference being less dovish than expected. The pound had fallen to 1.3161 after the monetary policy statement. It staged a slight rebound after the press conference.
European ETFs trading lower during opening trade
Looking at the performance Europe-related ETFs during early trade, the Deutsche X-trackers MSCI EAFE Hedged Equity ETF (DBEF) and the Vanguard FTSE Developed Markets ETF (VEA) fell by 0.42% and 0.18%, respectively, at 9:30 AM EST on July 21, 2016.
The iShares MSCI United Kingdom ETF (EWU) was trading with a negative bias. It had fallen by over 0.20% at 9:30 AM EST.