Comments to reporters in Madrid

The Vice President of the ECB adds:

• There are new downside risks to Euro area recovery
• Inflation developments not as satisfactory as liked
• Macroprudential policy absolutely essential
• No decisions have been taken on ECB stimulus
• Inflation expectations have dropped
• December monetary decision to be based on latest inflation available data
• Rate hike by Fed would have more of an impact on emerging markets, not so much on Europe (Meanwhile ECB Linde is saying at the same time that a fed rate hike would affect Europe economy).
• Markets realize US and EU monetary policies are diverging

in the rock, paper, scissors hierarchy, the comments from Constancio trumps the earlier comments from ECB Hansson.

As for the EURUSD reaction, the pair has moved a touch lower but not by much (6-8 pips) as liquidity conditions remain light and the pair recently failed - once again - to get below the 1.0700-05 area....Now, after trading down to 1.0721, the pair has squeezed back up to 1.0744. Liquidity conditions affecting the trading today.