EURUSD Plunges As Draghi Fears Deflation Risks

Tyler Durden's picture

Doing his best not to get dragged into the currency war conversation, ECB head Mario Draghi is, however, concerned at the impact of a stronger EUR on inflation (or to be more accurate dis-inflation). Noting not only that there remain downside risks to the economic outlook, as we highlighted previously (an 11% rise in trade-weighted EUR since July), his comments (that have smashed the EURUSD down 120pips so far) appear to be addressing a surging EUR.

  • *DRAGHI SAYS EURO AREA GROWTH RISK CONTINUES TO BE ON `DOWNSIDE'
  • *DRAGHI: REAL, NOMINAL EXCHANGE RATE NEAR LONG-TERM AVERAGE
  • *DRAGHI SAYS ECB WILL MONITOR EURO LEVEL FOR INFLATION RISKS
  • *DRAGHI STATEMENT SAYS EURO APPRECIATION RAISES INFLATION RISK (or Deflation)