CurrencyShares Euro Trust (NYSEArca: FXE) rallied nearly 1% in early U.S. trading Thursday after the European Central Bank held interest rates steady and ECB President Mario Draghi said the region’s economy is improving.
“Draghi on Thursday played down the threat to euro-zone stability posed by Italy’s inconclusive election results. Draghi said many of Italy’s fiscal reforms are set to continue on auto pilot, while financial markets continue to show signs of returning confidence,” MarketWatch reports. [Italy ETF Swings Lower on Berlusconi, Election]
Draghi’s previous promises to do whatever it takes to save the euro have reassured investors even though the Eurozone debt crisis continues to simmer.
On Thursday, the ECB left the benchmark interest rate unchanged at 0.75%. However, in a press conference, Draghi said the ECB had considered a rate cut.
“It’s up to governments to implement structural reforms and Draghi will make clear what the ECB can do compared to what governments can do,” said Marco Valli, chief Eurozone economist at UniCredit Global Research, in a Bloomberg News report. “But if the Italian situation impacts monetary policy or poses a downside risk to inflation, they’ll have to act.”
Draghi said Eurozone governments should implement structural reforms, adding that downside risks to the economy still remain.
“Our monetary policy stance will remain accommodative,” Draghi told reporters, according to a CNBC.com report. “The continued implementations of structural reforms should work their way through the economy.”
The euro ETF bounced Thursday after a tough February. The currency fund is still down about 4% for the trailing month including Thursday’s rally.
CurrencyShares Euro Trust
