After Mario Draghi's speech in the Washington DC, the toughest in his series ever, the single currency fell into a downward spiral, with EUR/USD loosing around 0.44% in the early morning European session. The most traded currency pair was changing hands around 1.3822, erasing some of the last week's gains, when the pair advanced 1.33%. Draghi's patience with the single currency has snapped. Last month we were making bets on when European officials will start talking down the Euro, as EUR/USD around 1.40 is a serious threat to the economy. It finally happened; the ECB's President Draghi claimed that a further appreciation of the shared currency will trigger more fresh actions from the central bank. A 6% appreciation versus the U.S. Dollar during the last year threatened central bank's ability to deliver inflation of just around the official target of 2%, as it would cheapen imports and hurt the region's exporters. During the last policy meeting Draghi pointed out policymakers are already considering the implementation of the U.S.-style quantitative easing, after the key inflation rate fell to 0.5% in March, hitting the lowest in more than four years. Another ECB member, Jens Weidmann claimed that Euro's appreciation was partly provoked by capital inflows, especially in the peripheral countries. According to the latest poll conducted by Bloomberg, the ECB will pull the trigger within two months. The ECB has made it clear, that it will enter the uncharted territory- cutting one of the benchmark interest rates below zero.
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