After the European Central Bank intimated its intention of keeping interest rates low for longer than previously expected last week the Euro broadly softened.
The common currency has since largely recouped losses against a softer US Dollar and Pound, but speculation over what the central bank actually meant with its unexpected forward guidance has been rife.
Luckily, today ECB Executive Board Member Benoit Coeure has spoken out in an attempt to clear the confusion.
According to Coeure, policy makers will discuss the issue of keeping interest rates low for an extended period at every monthly meeting.
During a televised interview Coeure asserted: ‘It will be reassessed Governing Council after Governing Council […] Forward guidance is not a shift in our strategy. It’s a way to clarify our communication and provide more stability to financial markets. The mandate of the ECB is the same: it’s intact, it’s a price stability mandate.’
Coeure also stated that policy will be reassessed ‘within our two-pillar strategy framework […] based on the available information on the economic side and on the side of money and credit. [Policy Makers] keep an open mind on all possible options.’
When asked about the possibility of a negative deposit rate being put in place Coeure referred to the measure as ‘part of the tool box.’
After Coeure made his remarks the Euro was little changed against the US Dollar and continued to trade in the region of 0.8630 against the Pound.
The most significant piece of Eurozone news to watch out for tomorrow, an industrial production report, is scheduled for release at 10:00 GMT
However, an absence of UK news may limit movement in the GBP/USD pairing.
Euro (EUR) Exchange Rates
As of 15:35
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3023 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8634 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4199 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6576 >
The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.3575 <
