EUR/USD is dropping after comments from the ECB’s Praet appeared in the Wall Street Journal. He said the ECB could adopt negative rates or buy assets from banks.
He didn’t rule out what some analysts see as the strongest, and most controversial, option: purchases of assets from banks to reduce borrowing costs in the private sector. “The balance-sheet capacity of the central bank can also be used,” said Mr. Praet, whose views carry added weight as he also heads the ECB’s powerful economics division. “This includes outright purchases that any central bank can do.”
He said additional stimulus isn’t needed right now but Praet’s hint at QE shows the ECB is considering more dramatic options.
With EUR/USD through 1.3400, the next layer of bids is at 1.3355/50 which marks the 100-day moving average.
Praet definitely not pointing the euro in that direction
