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ECB’s Weidmann – Oil drop is a stimulus

FXStreet (Mumbai) - The European Central Bank (ECB) governing council member and the Bundesbank’s President Weidmann was on the wires stating the drop in the oil price is a stimulus and not a reason for deflation.

Key Quotes

Sharp fall in energy prices is what is mainly driving low rates

Core inflation will gradually rise towards goal

The longer we go with an ultra loose policy, the greater the risks

No reason to talk down the economic outlook or paint a gloomy picture

Lockhart says comfortable with ‘moving off zero’; Fischer says no final decision on hike taken

The minutes of the U.S. Fed’s October meeting released on Wednesday showed the majority of U.S. central bankers in favour of a December liftoff. Fed officials seemed confident that the goals of full employment and stable two per cent inflation can be met in due course. Atlanta Fed President Dennis Lockhart is of the opinion that the turmoil in the global financial markets that had caused the Fed to delay rate hike, has settled considerably. "I believe it will soon be appropriate to begin a new policy phase," he said. He also expects prices to rise as the downward pressure from a strong dollar and low oil prices begin to fade. He is "comfortable with moving off zero soon," if of course there is no unexpected downturn in the economic outlook.
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EUR/GBP keeps lows around 0.6990

The bid tone around the pound is now picking up pace, dragging EUR/GBP to session lows in the 0.6990 area...
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