The euro today hit fresh 31-month highs against the dollar as investors took in the aftermath of the Jackson Hole conference of central bankers over the weekend.
In a much-anticipated speech European Central Bank (ECB) president Mario Draghi did not directly address monetary policy, but traders were reassured by his apparent lack of concern over the strength of the euro, which could drag on inflation.
The euro rose to highs of $1.1983 against the dollar in thin evening trading as London desks remained closed for the bank holiday. That was the highest level since the start of January 2015.
Investors were forced to wait for any sign of a decision on the future of the ECB’s quantitative easing bond buying. However, answering questions after the speech Draghi gave a positive assessment of the EU economy, saying that the recovery was starting to catch up with the US.
“Draghi provided investors an opportunity to keep adding to long positions,” said Hussein Sayed, chief market strategist at forex broker FXTM.
Meanwhile Federal Reserve chair Janet Yellen also ignored monetary policy, delivering a similar message that regulation has made the global financial system safer in another implicit rebuke to Trump.
The euro has surged in recent months as growth in the EU economy has gained momentum and political fears have diminished, particularly in the aftermath of the victory of Emmanuel Macron as French President.
However, investors in the Eurozone may be forced to wait longer for a decision on the future of the monthly €60bn (£56bn) bond purchases after the current December end-date, until after German parliamentary elections on 24 September.
The next ECB monetary policy meeting is on 7 September.