Eurozone stocks hurt by strong euro, as Draghi drives off doves

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Eurozone stocks hurt by strong euro, as Draghi drives off doves

On Thursday, the 6th of June 2019, a stack of Eurozone stock exchanges had ended the day broadly lower, wounded by a much-stronger euro after ECB (European Central Bank) Chair, Mario Draghi had not been sounded as dovish as he used to be.

Although the ECB had kept the eurozone interest rate unchanged saying that a next interest rate change could have been at least a year away, yet proffered an unprecedented bright spot on euro outlook, which had eventually broken off a three-day winning streak of eurozone shares.

At the Thursday’s (June 6th) market closure, the regional Pan-European index, STOXX 600 had shed 0.02 percent after witnessing choppy trading throughout the day, putting an end to a three-day of winning streak, while Germany’s trade-sensitive DAX shed 0.2 percent and France’s CAC 40 had fallen by 0.3 percent.

Meanwhile, London’s FTSE 100 had posted a gain of 0.55 percent, and Milan-traded equities had wrapped up the day higher despite another choppy session for the Italian lenders, shedding more than 1.2 percent on Thursday’s (June 6th) intra-day trading.

Besides, following ECB chair Dragh's comment, Euro had attained further bullish bias and winded down the day 0.44 percent up to 1.1275 after breaching a three-week high at 1.1309 during midday european trading hours, a level last seen on April 17th.

Adding that it had been difficult for ECB to stay positive amid a basket of tempestuous data, an investment director at Fidelily, Andrea Iannelli said, “It would have been very, very difficult for the ECB to out-dove the market and push yields even lower.

More importantly he did say rates are not going anywhere until 2020, potentially even longer… that doesn’t really help banks”.