8 Nov 2013
Flash: ECB now limited – BTMU
FXstreet.com (London) - Derek Halpenny explained one reason is perhaps the realisation that the ECB’s options from here are much more limited.
Key Quotes:
“President Draghi emphasised that the ECB had numerous tools in which to counter any unwarranted further fall in inflation but in reality that’s not really the case. A negative deposit rate is the one mentioned most but that is likely to be kept for any extreme risk event”.
“Another LTRO is possible too but it was clear from yesterday that there is no urgency in additional action any time soon. With the markets expecting a rate cut next month anyway, we think it unlikely that yesterday’s action alone will be enough to drive the euro further lower from here”.
Key Quotes:
“President Draghi emphasised that the ECB had numerous tools in which to counter any unwarranted further fall in inflation but in reality that’s not really the case. A negative deposit rate is the one mentioned most but that is likely to be kept for any extreme risk event”.
“Another LTRO is possible too but it was clear from yesterday that there is no urgency in additional action any time soon. With the markets expecting a rate cut next month anyway, we think it unlikely that yesterday’s action alone will be enough to drive the euro further lower from here”.