It’s all About Interest Rates. Draghi Hawkish, Carney Warns Consumers and Yellen…

Markets focus has shifted today to the three economic captains: Mario Draghi, Mark Carney, and Janet Yellen.

Draghi was the first to speak at the annual ECB forum in Portugal, and called a hawkish speech by saying that the Eurozone area is ‘strengthening and broadening’. Draghi confirmed that growth has spread over the Euro area and stimulus actions by the ECB will continue in the near future.

In reaction, the Euro surges 1.03% versus the greenback to trade at 1.1295 and climbed 0.58% versus the British Pound. The EUR/USD trades at two weeks high.

Bond yields rose sharply after Draghi comments on the European economy.

BoE governor Mark Carney raised buffer rates from zero to 0.5%, meaning that British banks will have to hold more than £11 billion extra capital. Carney said that a higher buffer rate might protect the UK economy in times of uncertainty.

The British pound climbed 0.27%, to trade at 1.2753.

As investors try to get further clues of the Federal Reserve next rate hike, Janet Yellen is scheduled to speak at London’s Royal Academy at 17:00 GMT, a speech that will be closely monitored and likely to add volatility.

A number of other top Fed officials are also due to speak later in the day.

Yellen is expected to hold her views on the economy from the previous FOMC June monetary meeting. The Dollar trades lower ahead of Fed speeches with the US dollar index down 0.56% at 96.57.