Euro dipped to 4 month low post ECB meet

European markets were seen to recover from the session lows to edge into the green at the close on Thursday (20^th October 2016) as the European Central Bank (ECB) decided to keep interest rates unchanged.

The pan-European STOXX 600 provisionally pulled the curtain down at 0.19 per cent higher with sectors mixed, though the banking sector led the charge with a rise of 1.16 per cent.

The FTSE 100 edged 0.07 per cent into the green while both the French CAC 0.44 per cent and Germany’s DAX rallied 0.52 per cent.

The Central Bank of Europe held rates, as widely expected, however President Mario Draghi sent stocks along with the euro on a wild ride with his comments on future policy. Despite all the repeated questions from reporters in the press conference following the announcement, Draghi never wavered from affirming there had been “no discussion” regarding the question of when the bank’s bond-buying program would be extended or even wound down.

Kallum Pickering, a senior UK economist with Berenberg bank, suggested that most of the investors will be eagerly waiting for the December meeting which could prove to be much more volatile. He further added in a note that the potential for market dislocations and volatility if the ECB did not meet market expectations come December would be high. That the ECB did not look to alter market expectations is significant – an extension of QE beyond the month of March 2017 therefore is very likely.

The euro market rallied hard before trimming gains whilst stocks were sent in the opposite direction.

With nothing much in the European Central Bank latest deliberations to rock the boat, stock markets managed to end the day in positive territory, even as the euro was put under pressure. The banking sector was boosted by this week’s positive results from US financial businesses, with BNY Mellon being the latest to report better than expected figures.

So the final Scores Showed:

• The FTSE 100 finished up 0.07 per cent or just 4.98 points at 7026.90
• Germany’s Dax rose 0.52 per cent to 10,701.39
• France’s Cac climbed 0.44 per cent to 4540.12
• Italy’s FTSE MIB was up 0.57 per cent at 17,141.38
• Spain’s Ibex ended 1.24 per cent higher at 9061.2
• In Greece, the Athens market added 0.49 per cent to 595.90

On Wall Street, Dow Jones Industrial Average is currently fairly steady, up 7 points or 0.04 per cent. Elsewhere the pound is down 0.2 per cent against the dollar at US$ 1.2255, and up 0.14 per cent at €1.1212. Against the dollar the euro has fallen 0.39 per cent to a four month low of US$ 1.0930.

Related Articles :

• ECB Keeps Rates Unchanged, Italy’s Banks in Focus