The euro surged versus the dollar after European Central Bank President Mario Draghi’s press conference on Thursday. EURUSD jumped to a high of $1.3115. The single currency had been rising from $1.3023 after the ECB announced it left interest rates on hold at 0.75 percent.
The markets reacted positively to Draghi’s press conference despite being initially downbeat on the economic outlook for the euro zone. He gave optimism on the euro zone recovery by saying the ECB’s accommodative policy helps.
Draghi reiterated that monetary policy will remain “accommodative” against a backdrop of “firmly anchored” inflation expectations. Draghi said data continue to suggest the euro-zone economy should stabilize in the first half, with activity set to pick up later in 2013.
Meanwhile the Bank of England left the size of its quantitative-easing program unchanged, despite some market participants expecting an increase. There is though some speculation that expansion of QE could come in the near future as the UK economy is still struggling to recover and may need more stimulus.
The BOE Monetary Policy Committee voted to keep its asset purchase program at 375 billion pounds ($565 billion) while maintaining benchmark interest rate unchanged at a record low 0.50 percent, where it has been for the past four years.
Sterling rose to $1.5081 rising from around $1.4986 ahead of the announcement.