Euro gives up gains after ECB's Constancio says policy stance unchanged

The single currency's gains evaporated as one of the highest-ranking officials at the European Central Bank said a speech by his boss the day before had not signaled any change in the policy stance.

Speaking at the ECB Forum on Central Banking on 27 June, Mario Draghi said the recent dip in consumer prices was transitory, which led several analysts to conclude that Draghi was sounding a slightly more 'hawkish' note than on previous occasions.

However, on Wednesday ECB vice-president Vitor Constancio said that if one read Draghi's speech completely it was "totally in-line" with his statements made at the press conference following the Governing Council's last monetary policy meeting, on 8 June.

On that occassion, the GC improved its so-called 'balance-of-risk' assessment, saying risks to growth in the Eurozone were now balanced. However, policymakers reiterated that the economic expansion had "yet to translate into stronger inflation dynamics".

To back up his case, Constancio also referenced the part of Draghi's speech where he said that unemployment in the euro area, when measured as the US did with its U6 definition of joblessness, stood at 18%, versus just 9% in the States.

"Personally, I don't see anything in [Draghi's] speech that would be different from, say, the previous two main interventions about monetary policy done by the President."

As of 1436 BST euro-dollar was off by 0.01% to 1.1336, having earlier risen to 1.1389.