Dovish Draghi sends Euro downwards

The Euro exchange rate dropped to a two week low and European stock markets jumped as a result of a dovish market outlook presented by ECB president Mario Draghi following the September ECB Governing Council meeting.

The Governing Council downgraded its growth and inflation outlook for the Euro area, with GDP forecasts for 2015 now expected to be at 1.4%, annual HICP inflation is anticipated to be at 0.1%.

Draghi added that these figures were compiled ahead of the Chinese stock market crash and warned that downside risks may have increased since.

While the ECB left key interest rates unchanged, Draghi announced that the Governing Council decided to increase the issue share limit on QE bond purchases from the initial limit of 25% to 33%. He also suggested that QE measures could continue beyond the initial timeline of September 2016.

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