Thursday, July 26, 2012

Europe's Central Bank Signals Action

Wall Street Journal
July 26, 2012

European Central Bank President Mario Draghi sent the strongest signal to date that the ECB was willing to use its power to print money to preserve the euro, giving investors hope that the bank was poised to undertake massive purchases in euro-zone bond markets if the region's crisis worsens.

"Within our mandate, the ECB is willing to do whatever it takes to preserve the euro and, believe me, it will be enough," Mr. Draghi said in a speech in London, one week ahead of the ECB's next policy meeting.

Officials have pledged in the past to support the euro, but Mr. Draghi's promise that "it will be enough" was more definitive than anything he has said since becoming ECB president nine months ago.

Asian markets opened higher Friday on Mr. Draghi's comments. Japan's Nikkei gained 1.2% and Australia's S&P ASX 200 was up 0.8% in early trading. Asian currencies were also boosted by the comments.


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