Analysts at ABN AMRO stated that a rate cut by the ECB would be an instrument to fight against currency strength.
Key quotes
“At last week’s Governing Council meeting, ECB President Mario Draghi set out clearly that the central bank was willing to restart QE, cut rates and further extend forward guidance.”
“Mr Draghi said that the Governing Council had not yet ‘discussed which contingency would call for which instrument’.”
“Overall, our sense is that the ECB’s two-year ahead inflation outlook is not (yet) low enough to trigger QE, but developments in inflation expectations likely are.”
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