That’s an important level on the near-term chart as it halts the series of lower highs. Fixing demand is a likely culprit. The ECB’s Bonnici spoke with the WSJ saying that if the euro carries on strengthening then “it becomes an issue that one has to take into account.” The comment is getting some attention but it’s hardly jawboning.
Other comments from Bonnici:
- A negative rate “remains a possibility. We are prepared for it,”
- “There is unanimity that if we need to, we can move into these nonstandard measures”
- “There are various ways that one can mix sovereign and private assets” in QE
Measures the central bank could take include injecting additional funds into the banking system, charging banks to hold their excess funds and making large-scale purchases of securities issued by private- and public-sector borrowers.
