EUR/USD spiked more than 25 pips after mixed remarks from the ECB President Mario Draghi. However, the direct currency pair is trading in line with our forecast.
The last year has seen a loss of growth momentum in the Euro area, which has extended into 2019.
- We expected the expansion to slow in 2018 as the business cycle matured and growth retreated towards potential.
- The domestic economy has remained relatively resilient, and the drivers of the current expansion stay in place.
- The risks to the outlook remain tilted to the downside.
- Remain confident that sustained convergence of inflation to target has been delayed rather than derailed.