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The head of the German central bank Jens Weidmann, said that “the ECB may adjust rates if new information warrants it”.

EUR/USD crashes and now trades at 1.3050.

With German inflation sitting below the 2% target and with the high value of the euro weighing on exports, this comment is understandable, but it comes from a conservative member of the ECB – the inflation fearing Bundesbank.

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The European economies are certainly suffering, and a rate cut could definitely help.

EUR/USD has strengthened in recent days, enjoying the gap between central banks: the US and Japanese are very active with QE programs, and this adds flows into Europe, where the central bank is practically tightening.

For more, see the EUR/USD forecast.