US President Donald Trump has hit out at Mario Draghi, claiming his hints of fresh stimulus made it “unfairly easier” for Europe to compete with the US.
Draghi suggested the ECB could cut interest rates or expand its bond-buying programme in a bid to reinvigorate the ailing Eurozone economy.
The euro plummeted 0.25 per cent against the dollar following Draghi’s comments, sending European stock markets soaring.
The German DAX rose, trading 1.2 per cent up for the day, and the French CAC climbed to 1.42 per cent, after both suffered early losses.
But Trump, who has threatened to impose auto tariffs on the EU as part of his trade policy, said it was “unfair.”
“Mario Draghi just announced more stimulus could come, which immediately dropped the euro against the dollar, making it unfairly easier for them to compete against the USA.
“They have been getting away with this for years, along with China and others,” he said in a Tweet.
Inflation has been under the ECB’s target of just under two per cent since 2013, and Draghi said it may soon be time to act.
“In the absence of improvement, such that the sustained return of inflation to our aim is threatened, additional stimulus will be required,” Draghi said at the ECB’s annual conference in Portugal.
“[We] will use all the flexibility within our mandate to fulfil our mandate – and we will do so again to answer any challenges to price stability in the future,” he added.
Draghi will be replaced as ECB president in October but hinted the stimulus could kick in as soon as its next policy meeting in July, saying policymakers would consider the issue “in the coming weeks”
IG analyst Chris Beauchamp said: “Despite only having a few months left to his tenure, the head of the ECB has handed his successor a firmly dovish bias, as he leaves the door open to more QE and renewed negative rates at the ECB in order to try once again to kick-start the eurozone economy.