Euro weakened last night as reports emerged that the ECB is studying a change to its traditional inflation goal of ‘below, but close to, 2%’. Draghi is said to prefer a ‘mirror’ approach, with the same leeway above and below the target figure, letting the ECB keep inflation high to make sure that price growth really has returned. The person who ultimately leads this change, however, will be Christine Lagarde, and it remains to be seen what her attitude will be. Lagarde’s former colleague, the IMF’s Chief Economist, has previously advocated a 4% goal.
This morning, figures showed that the Eurozone’s current account surplus has widened to 13.3 billion, an increase of 4 billion since this time last year. It’s otherwise a light day for economic releases, and most movement will likely come from political developments.
Next week, we will see services PMI on Wednesday and German business climate figures on Thursday. Movement is more likely to come from influences outside the eurozone, as the UK announces its new Prime Minister.
