Back
8 Jan 2015
Markets seize upon QE comments by Draghi
FXStreet (London) - Markets were quick to jump on mention of European QE in a letter sent by European Central Bank president Mario Draghi.
In a reply to a member of the European Parliament, Luke Ming Flanagan, Mario Draghi mentioned the possibility of the European Central Bank enacting sovereign bond purchases.
“Should it become necessary to further address risks of too prolonged a period of low inflation, the Governing Council is unanimous in its commitment to using additional unconventional instruments within its mandate. This may imply adjusting the size, pace and composition of the ECB’s measures. Such measures may entail the purchase of a variety of assets ‒ one of which could be sovereign bonds, as mentioned in your letter.”
The comments sent the euro lower, falling sharply to USD1.1772 with markets quick to jump on any mention of QE. However it is likely that we’ll see declines reversed after the initial overexcitement.
In a reply to a member of the European Parliament, Luke Ming Flanagan, Mario Draghi mentioned the possibility of the European Central Bank enacting sovereign bond purchases.
“Should it become necessary to further address risks of too prolonged a period of low inflation, the Governing Council is unanimous in its commitment to using additional unconventional instruments within its mandate. This may imply adjusting the size, pace and composition of the ECB’s measures. Such measures may entail the purchase of a variety of assets ‒ one of which could be sovereign bonds, as mentioned in your letter.”
The comments sent the euro lower, falling sharply to USD1.1772 with markets quick to jump on any mention of QE. However it is likely that we’ll see declines reversed after the initial overexcitement.