Mario Draghi helps the Euro to gain strength

European Government Bonds: Too Early For The ECB To Announce A Change In Guidance

European Central Bank President Mario Draghi took a swipe at the US administration, saying the euro's recent rise was partly the result of comments that contradicted an agreement not to talk currencies up or down.

"The euro jumped past US$1.25 for the first time in over three years after the European Central Bank appeared to be more relaxed about the currency's recent appreciation than many market participants expected", said ETX Capital analyst Neil Wilson.

Stimulus withdrawal has been much discussed in markets because the eurozone economy is growing strongly.

The pound meanwhile climbed further as British finance minister Philip Hammond said he was "very happy" with sterling's recent strength, as it continues to recover from a Brexit-fuelled slump.

Yields on most euro zone government bonds, particularly the higher-rated ones, have risen in recent weeks as a booming euro zone economy fuels inflation expectations and bets that the European Central Bank would withdraw its 2.55 trillion euro bond-buying scheme and hike rates sooner rather than later.




Draghi went on to say: "The recent volatility in the exchange rate represents a source of uncertainty.with regard to its possible implications for the medium-term outlook for price stability". In contrast, and U.S. index futures hit new record highs.

But that progress was stopped later in the day as Trump sought to play down the speech by the United States treasury secretary by saying that the dollar was bound to get stronger due to the strong economic data.

U.S. Treasury Secretary Steve Mnuchin said he welcomed a weak dollar, arguing that it was good for U.S. trade, and Commerce Secretary Wilbur Ross said "U.S. troops are now coming to the ramparts" in global trade wars.

In equities, European markets were all lower, under the weight of the rising euro, despite positive data out of the region's economic powerhouse, Germany. "The German economy made a dynamic start to the year", it added. This suggests anyone who is looking to sell Euros might not see the rates drop back to the levels in the last 6 months.

At the same time, a forward-looking survey by market research GfK forecast that consumer confidence has risen to its highest level since 2001, buoyed by record-low unemployment and expectations of wage hikes.

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