EUR/USD Steady Around 1.37 as ECB Considers All Actions

Expectations the ECB will “shock and awe” the market with a package of easing measures next month has pushed the euro lower, but some analysts worry one of those potential moves – a negative deposit rate – could backfire.

“The ECB has talked about it for the last 18 months,” said Mark Wall, co-head of European economics at Deutsche Bank. “It’s almost like they’re afraid to implement it. But they’ve waved it around like a loaded gun so often when it suited their purpose saying, ‘we could do this.'”

The deposit rate is already at zero. Many analysts expect a 10 basis-point cut in the rate, meaning the ECB would effectively charge banks for parking their money at the central bank rather than lending it.

CNBC

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.