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)