Trump blasts Draghi, China for weak currencies

Daniel Fowler
June 19, 2019

"In the absence of improvement, such that the sustained return of inflation to our aim is threatened, additional stimulus will be required", he told the ECB's annual conference in Sintra, Portugal.

Carney said he would cut interest rates in the United Kingdom to "close to but a little above 0 per cent", to deal with any economic shock, adding that his comments should not be seen as a prediction of what is likely to happen next in the UK. Draghi noted it was also possible to re-start a bond-buying stimulus program that had been halted only in December.

Benchmark bond yields fell globally following Draghi's hints of more stimulus, with German bond yields hitting record lows deep in negative territory, around -0.32 per cent, and French 10-year yields turning negative for the first time.

Trump responded Tuesday morning with a tweet criticizing the European Central Bank and China, who he said "have been getting away with this for years".

"(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", Draghi said on Tuesday. However, Draghi's Tuesday remarks immediately boosted euro inflation against the dollar by up to 0.3%.

Facebook's new cryptocurrency Libra will hit the market in 2020
Most importantly, Calibra will allow users to send Libra to nearly anyone with a smartphone just like sending a text message. Facebook said Calibra "may integrate with cryptocurrency exchanges", but will not act as an exchange.

Apple Inc, Inc and Microsoft Corp rose between 0.8 per cent and 2.4 per cent, with the tech triumvirate contributing more than any other stocks to increases in the S&P 500 and Nasdaq. A weaker euro makes European exports more attractive around the world.

US President Donald Trump said he had a "good" conversation with China's Xi Jinping and would hold an "extended meeting" at the Group of 20 summit in Japan later this month.

With four years of unprecedented stimulus to revive the euro zone economy slowly bearing fruit, the European Central Bank had been preparing markets for policy tightening, dubbed "normalisation" - only to see a global trade war derail its plans within months. Fed Chair Jay Powell has said that the Fed is prepared to respond if it decides the U.S. The U.S. dollar has strengthened against both the euro and China's currency. The US central bank has been a target of Trump's wrath for the better part of a year because the president views the Fed's policy rate as too high.

Both the European Central Bank and the Fed, which holds a policy meeting Tuesday and Wednesday, have cited similar reasons for their policy shift - the threat of a softening global economy if Trump and the Chinese don't reach agreement on trade.

Other reports by

Discuss This Article