This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

What Will Mario Draghi and the European Central Bank Do This Time?

NEW YORK (TheStreet) -- The European Central Bank is meeting again this week. Speculation is in the air as was the case a little earlier this year.

The betting is the euro is going to become weaker because Mario Draghi, the president of the European Central Bank, wants to provide more monetary easing, perhaps dropping the value of the euro to go below $1.36.

Along with help from Janet Yellen, his counterpart on the Federal Reserve, the value of the euro actually broke the $1.34 barrier as it dropped to $1.3367 on July 30. The value rose a little after that as the euro closed at $1.3422 on Monday, August 4, but at 10:30 today, it was trading a little below the July 30 close at $1.3364.

Expectations are for the euro to fall further. The expectation was the euro could fall as low as $1.3200. Today there are thoughts it could go as low as $1.3000, down a full 10 cents from where it was trading around $1.40 in the first half of March this year.

The overwhelming concern being expressed in these expectations is the economy of the eurozone is falling from disinflation to deflation.

If this is true then the pressure is on the ECB to take an even more aggressive stance with respect to monetary policy in order to try and get the eurozone economies growing faster and stem the falling rate of price increases.

One should note that in the earlier meeting, the ECB moved a policy rate into negative territory...something very radical in itself.

But Draghi has continually resisted moving the ECB into a stance of quantitative easing. He seems to have doubts about whether or not quantitative easing can do much good -- a judgment he has apparently draw from the America experience -- and has tried to avoid moving in that direction.

However, it appearing as if he has less and less room to maneuver in terms of continuing to avoid moving toward quantitative easing. In fact, more of the market sentiment seems to be that he will eventually have to take that step and the question is only when will he make it.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.15 -0.50%
FB $118.16 0.08%
GOOG $699.87 0.60%
TSLA $213.43 -4.10%
YHOO $37.00 2.80%


Chart of I:DJI
DOW 17,697.25 +45.99 0.26%
S&P 500 2,055.71 +4.59 0.22%
NASDAQ 4,733.79 +8.1510 0.17%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs