Traders confident in Draghi’s efforts to weaken euro

Traders are showing confidence in Mario Draghi’s ability to weaken the euro and stave off deflation, even as the initial results of a key part of the European Central Bank president’s plan fell below estimates.

Mr Draghi has signalled he wants to boost the central bank’s balance sheet to as much as €3 trillion of assets from €2tn, expanding the supply of euro in the process. Yet, when the ECB went to lend cash to banks under its first targeted longer-term refinancing operation, they borrowed just €82.6bn.

Companies from UBS Wealth Management to Morgan Stanley say they aren’t discouraged, and the 18-nation currency is poised to depreciate further as more euro make their way into circulation.