ECB Reawakens FX Volatility as Lower Negative Deposit Rates Discussed

The President of the European Central Bank, Mario Draghi, mentioned that the central bank is looking at a number of

As the European trading desks near the close of today’s trading, certain dealers are feeling the pinch from what could be a very important press conference delivered by European Central Bank (ECB) executives in Malta. While leaving rates unchanged, the Governing Council of the ECB has committed to use all the tools at its disposal to reawaken inflation rates in the Eurozone.

ECB President Mario Draghi has highlighted the resilience of the EUR/USD exchange rate, revealing a preference on the governing council of the ECB for the depreciation of the single currency to continue. While he has implicitly stated that the exchange rate of the euro is not a policy objective, the negative inflation rates in Europe persist.

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The EUR/USD  has fallen over 150 pips in the aftermath of the comments from the President of the ECB and the rate has still not stabilized. With October being a sluggish month for the most part the development is welcome news for retail FX brokers.

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Just days before the Finance Magnates’ London Summit is to discuss the alternatives for retail FX brokers in slow markets. The best thing that could happen is for foreign exchange volatility to return in full force so as to give the companies time to adjust to a new retail investor; a retail investor interested in multi-asset trading.

At the panel titled “Multi-Asset Trading – The Next Frontier” a number of key executives in the industry leading different types of efforts into the multi-asset space will gather to exchange ideas.

In the meantime, Mario Draghi will continue to exercise “vigilance” as he confirmed the words of his predecessor at the helm of the ECB, Jean-Claude Trichet.

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