Draghi's most-famous speech turns five
In the depths of the Eurozone crisis five years ago, Mario Draghi delivered an inspiring speech on the health of Europe and the future of the economy.
It worked. EUR/USD rallied 1100 pips in the subsequent six weeks. In time, policymakers curried support for QE and after years of floundering, there is some optimism in Europe.
A big part of that was engineering a weak currency. The euro was at 1.2600 when he delivered the speech and it's at 1.16 today after a 1000 pip rally since April.
But with the latest gains in the euro, it's back near the top of the back. In the bigger picture, the US dollar strength looks independent and the euro has outperformed most of its peers in those five years.
It's taken some truly extraordinary measures and the hawks fought him to the highest courts. Draghi won and the Eurozone is much more cohesive than it was five years ago.
That said, the euro is still a flawed union that benefits the North at the expense of the South. Annualized growth since the speech has been less than 1%. Total GDP in the eurozone is only 3% higher than it was in the 2008 peak, a true lost decade.
So Draghi can certainly claim victory in the battle to save the euro but the war will rage again.
