Euro hits session high after ECB’s Draghi predicts inflation pick up

DANIEL ROLAND | AFP | Getty Images

Mario Draghi, President of the European Central Bank (ECB) arrives for a press conference following the meeting of the Governing Council in Frankfurt am Main, Germany, on September 13, 2018.

The euro touched session highs after European Central Bank (ECB) President Mario Draghi said Thursday that he expected inflation to pick up toward’s the end of the year.

Earlier, the ECB had kept its main rates unchanged and had promised to stick to its stimulus exit timetable.

Speaking at a press conference of the monetary policy decision after the ECB Governing Council in Frankfurt, Draghi said underlying inflation was muted but should pick up by the end of 2018.

“While measures of underlying inflation remain generally muted, they have been increasing from earlier lows. Looking ahead, underlying inflation is expected to pick up towards the end of the year and to increase further over the medium term”, he said.

Draghi added that upward inflation pressure would not be short-lived as wage increases were not temporary.

“The underlying strength of the economy continues to support our confidence that the sustained convergence of inflation to our aim will proceed and will be maintained even after a gradual winding down of our net asset purchases,” he said.

Following the remarks, the euro reached 1.1428 versus the dollar before retracing steps. The euro also rose a three-week high of 88.58 pence against sterling.