The euro fell for the fifth consecutive day as the market begins to focus on potential European Central Bank easing. On Thursday, the Account of the January ECB policy meeting was released and indicated that the Bank is on course for more aggressive monetary easing to boost flagging growth and weak inflation, amid fresh warnings about the outlook for the global economy.
The summary of the meeting showed that the ECB Governing council was unanimous in concluding that its current policy stance “needed to be reviewed and possibly reconsidered” in March, when the ECB’s quarterly macroeconomic projections will be available. This suggests further stimulus measures could be taken soon, even at the next meeting next month.
Earlier this week Mr Draghi heightened expectations that the central bank will take further action in March to bolster the Eurozone economy, when he told the European parliament that the central bank would hesitate to act.
Many are expecting the ECB’s deposit rate to be cut another 10 basis points to minus 0.4 per cent in March, while the €60bn quantitative easing programme launched a year ago is likely to be increased in scope.
The ECB first pushed interest rates into negative territory in June 2014. In December, the ECB stepped up its efforts, pledging to keep QE going until March 2017 or later, while cutting its deposit rate 10 basis points further into negative territory, at minus 0.3 per cent.