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Euro, Pound Little Changed Following Draghi’s Mixed Comments

Investing.com - The euro and the pound were little changed against the U.S. dollar on Friday in Asia following mixed comments from European Central Bank (ECB) President Mario Draghi.

The euro initially rallied after Draghi signalled that the ECB would ease in September to battle the euro zone’s economic slowdown as the outlook gets “worse and worse,” he said.

The EUR/USD pair last traded at 1.1149 by 11:45 PM ET (03:45 GMT), up 0.04%. The GBP/USD pair slipped 0.05% to 1.2447.

The ECB kept rates unchanged on Thursday, just after manufacturing data in the euro area showed that the economy is contracting, while business confidence in Germany fell.

“It’s getting worse and worse in manufacturing, especially, and it’s getting worse and worse in those countries where manufacturing is very important. But because of value chains this propagates all over the euro zone. And so this must be taken into account,” Drahi said in Frankfurt.

Draghi indicated the bank was prepared to cut rates in September and consider other options for easing. However, he also said the risk of a recession in the region was low.

Some traders interpreted his message as the central bank would not be as aggressive in its easing measures and that the U.S. Federal Reserve could follow suit when it meets next week.

The U.S. dollar index that tracks the greenback against a basket of other currencies was little changed at 97.512 ahead of the second-quarter GDP data due later in the day. Traders will then shift their focus to the Federal Reserve and Bank of Japan meetings next week.

The USD/JPY pair was unchanged at 108.61. The AUD/USD pair and the NZD/USD pair both slipped 0.1%.

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