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October 2015

ECB voiced concerns over markets

Published: Thursday 22 October 2015

The European Central Bank President Mario Draghi's press conference was the real showstopper today. He highlighted concerns over growth in emering markets along with failing short-term inflation, low energy prices and confessed that had discussed cutting rates. Coming into this meeting, it was widely anticipated that the ECB was firm on it's rate policy and would only look to ease it's QE program. Instead the ECB are toying with the idea of a negative rates policy.

As a result, the Euro depreciated significantly against all it's peers and taken substantial hits today or more than 1.5% against the Pound and the US Dollar.

It would appear that the meeting in Decemeber is now considered one where the ECB could roll out significant policy changes like a shift in the QE program or cutting rates. Apart from dropping rates, alterations in the QE program could include increasing it's duration or increasing it's size and any of the above will cause the Euro to depreciate further.