Draghi used ECB policy to materially weaken Euro – Investec

By FXStreet FXStreet (Delhi) – Research Team at Investec, note that President Draghi used the ECB monetary policy meeting to materially weaken the Euro citing global growth risks and low inflation as a driver to likely add stimulus at December’s ECB meeting.

Key Quotes

“Whilst the ECB kept all policy rates on hold as well as the size and duration of the current QE program the same, President Draghi left the door open for a ‘menu’ of stimulus options for December’s meeting. In a nod to his predecessor, Draghi hinted he wants to be ‘vigilant, as people used to say in the old times’ – this was ex-President Trichet’s code for a policy change at the next meeting.”

“Draghi went on to say the Governing Council can adjust the ‘size, composition and duration’ of the current QE programme if needed, but other options are possible. For example, Draghi revealed that the Governing Council discussed the possibility of a further cut to the deposit rate, which currently stands at -0.20%.”

“Previously assumed the lower bound, this added fuel to the Euro selling fire on the day, which continued overnight. The market is likely to speculate in the coming weeks on exactly how far the ECB will …read more

Source:: FX Street