-Erkki Liikanen, Governing Council member
The single currency received another bearish impulse from ECB's officials' comments on Wednesday, as they revived QE speculations. The most traded currency pair plunged more than 60 pips during the European morning session, reaching fresh lows, following EU's Olli Rehn comments. The European Union Economic and Monetary Affairs Commissioner Olli Rehn pointed out that it is better to overshoot rather than undershoot in crisis policy response, as economic recovery is gaining momentum, however, is still fragile. He also warned about weak growth prospects, highlighting record-high unemployment and big debt burden.
Another member, Erkki Liikanen said Tuesday the central bank recent intention is a clear sign officials are determined to keep monetary policy accommodative in the future to fight deflation and weak growth. Furthermore, ECB Executive Board member Benoit Coeure warned that the ECB is intensifying actions aimed at boosting European Asset Backed Securities, also adding to sign the QE is still an option. While ECB's Noyer said the recently-launched extended liquidity regime is already an equivalent to off-balance sheet quantitative easing, Mario Draghi's words "we will act swiftly with further monetary policy easing" are adding to sings we can see more actions in the coming months.
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