Currency Hedged Europe ETFs Get Good News

With global volatility threatening the Eurozone economic recovery, the European Central Bank could be forced to enact more aggressive measures, potentially lifting Europe-related exchange traded funds.

ECB president Mario Draghi said that officials will review their plans at the next policy session in March and stated that there are “no limits” on how far the central bank will go within their mandate, reports Paul Gordon for Bloomberg.

“We are adapting our instruments to the changing conditions,” Draghi said. “The credibility of the ECB would be harmed if we weren’t ready to revise the monetary-policy stance.”

For instance, Draghi signaled that the ECB could expand its quantitative-easing program to bolster growth and bring inflation back up, stating that the return of inflation to target is more important than the impact of ultra-low rates. The ECB is scheduled to publish its quarterly Survey of Professional Forecasters on Friday, which will help provide clues on the inflation outlook.

After the more hardened stance from the ECB, the iShares MSCI EMU ETF (NYSEArca: EZU) rose 1.0% and the SPDR EURO STOXX 50 (NYSEArca: FEZ) was 0.8% higher late Thursday. The two ETFs both focus on Eurozone countries.