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EUR plummets on inflation expectations – MP

FXStreet (Barcelona) - Dean Popplewell, Director of Currency Analysis and Research at MarketPulse, notes that Draghi’s comments on fighting inflation are currently suffocating the EUR and the crosses.

Key Quotes

“The EUR (€1.2438) has managed to take a sharp turn lower after his (Draghi) comments regarding inflation in Frankfurt – again indicating that Euro policy makers will do what it must to raise inflation back to its target.”

“His assessment of growth and inflation is supporting market expectations that the ECB will need to adopt full-blown QE sooner rather than later.”

“His evaluation of the Eurozone in his speech would strongly suggest that the ECB is about to up the ante as early as the December meet in a few weeks.”

“His ‘dovish’ comments (inflation situation more challenging, committed to recalibrating size, pace and composition of asset purchases and the potential broadening of channels through which the ECB intervenes) are currently suffocating the EUR outright and on the crosses (fresh day lows for EUR/JPY €146.46, EUR/GBP €0.7938).”

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