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ECB discussed deposit rate cut

Thursday, Oct 22 2015
At today's meeting ECB left interest rates unchanged. However, euro was pushed lower after ECB President Mario Draghi at the following Press Conference said that ECB is ready to act if 2% inflation target is in danger of being pushed back and that there was discussion on deposit rate cut, as well as set of additional measures. He also noted that ECB projections are based on assumptions. "If they change we have to adjust", Draghi said adding that projections are conditional to QE being fully implemented.
 
ECB Vice President Vitor Constancio stated that there is a measurement problem with inflation. "Negative inflations rates can be very detrimental and there are also deflation risks, but a few months of negative inflation is not really deflation", according to Constacio. If deflation lasts for many months there are increased problems and central banks are willing to fight that, it was concluded.
 
Euro is currently being traded at 1.12 handle. Pair is likely to find support around 1.1130 level and resistance above 1.1260 level. Conference still lasts so we can expect more volatility by the end of it and the end of the session.
More in this category: « Unemployment Claims up to 259,000 All of Australia's big four banks have raised their variable interest rates »

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