The pound to Euro rate has dipped slightly in the last few hours due to Mario Draghi, the European Central Bank President making a statement that sterlisation will remain and the Eurozone is an ‘Island of Stability’. Commenting on how the Eurozone has low growth and high Unemployment Mario Draghi talked about how despite these issues, the Eurozone was safe and that there had been subtle improvements in conditions which meant any change in policy was at this stage unwarranted.
Looking forward the ECB see downside risks due to the Ukrainian situation but for now it was stated these issues appeared to be contained. The ECB also commented that the worries there and in emerging markets were likely to persist and as such the Euro would be seen favourably by investors. There would therefore continue to be capital flows coming into the Eurozone which would keep the Euro supported.
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