Draghi Downplays Currency Wars

The euro traded steadily below $1.34 on Tuesday morning after European Central Bank President Mario Draghi made statements in Brussles indicating that the bank was not considering an interest rate cut in the near future. The common currency traded at 1.3353 at 6:42 GMT on Tuesday.

reported that Draghi addressed the European Parliament in Brussels on Monday, where he reiterated that the euro's value wasn't a target for the ECB in setting policy. At their next monthly meeting, the ECB will asses economic and inflation forecasts and determine whether or not a rate cut is needed; which is looking less and less likely. While speaking before the European Parlament, Draghi calmed nerves over the recent weak GDP data, saying the eurozone was stabilizing but at “low levels”. He maintained his position on fiscal austerity, saying governments must continue to reform their own systems while the ECB tries to accommodate struggling nations through monetary policy. Draghi spent the weekend with other finance officials and central bankers from around the world at the Group of 20 meeting in Moscow. The meeting centered around currencies and monetary policy after some feared that a currency war was developing. However following the meeting, all G20 members agreed not to drive down the value of their currency in order to gain a competitive edge. The euro began 2013 on strong footing, and the currency soared on renewed confidence and an optimistic sentiment within the region. However its sharp rise has created concerns in many of the bloc's largest economies as exports became less competitive in the global market.