Investors had been hoping for a clear signal from Mario Draghi that the European Central Bank was ready to take action to prop up the euro. But in his press conference following the ECB monthly meeting on Thursday, all he offered was more promises. Markets plunged as a result.
Anticipation ahead of Thursday’s European Central Bank (ECB) meeting was high. Last week, ECB head Mario Draghi had pledged that the bank would “do whatever it takes to preserve the euro.” The comments set offa mini rally on stock markets the world over, and even the euro began gaining back some lost ground. Investors were eager to find out what exactly he intended to do.
Draghi, it would seem, was unable to live up to their expectations. “The Governing Council … may undertake outright open market operations of a size adequate to reach its objective,” the ECB president said. “We will consider further non-standard monetary policy measures according to what is required to repair monetary policy transmission. In the coming weeks, we will design the appropriate modalities for such policy measures.”
Markets plunged before he was even finished with his press conference. Germany’s blue chip stock index DAX plummeted immediately by 1.88 percent, and the euro cratered in value from $1.24 to below $1.22. American stock futures, which indicate how stock markets in the US might perform on a given day, slumped as well, signalling a potentially rotten day on Wall Street.
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See Also:
Losing 500,000 Jobs Seen New Reality of Europe Crisis
ECB press conference: Mario Draghi’s opening statement
Mario Draghi’s speech: what the analysts say
Draghi’s threat to Europe’s middle class
Mario Draghi mouths more promises, but action is nowhere to be seen
Afternoon Updates:
12:02 pm EDT, August 3rd, 2012 — ECB lack of action ‘borders on irresponsible’
12:03 pm EDT, August 3rd, 2012 — Where is your big bazooka, Mr Draghi?
12:04 pm EDT, August 3rd, 2012 — Competitiveness is improving but Europe urgently needs growth
12:07 pm EDT, August 3rd, 2012 — Markets crumble as Draghi bond plan deemed too vague
12:08 pm EDT, August 3rd, 2012 — Opinion: ECB’s half-hearted announcement
12:09 pm EDT, August 3rd, 2012 – Dissent tears at the ranks of PASOK
