Draghi and Hollande

Europe slow growth a deflation threat – no further downside expected

French President and European Central Bank (ECB) President Mario Draghi both agreed that measures need to be taken to stimulate growth in the Euro zone. Whilst France and the ECB agree that austerity measures need to be replaced by stimulus measures Germany has a different tone.

The Euro has sunk to 12 month lows in recent days trading as low as 1.3117 against the USD. Stimulus could lower this currency outlook further. The Euro Interest Rate decision is due on the 4th September and all eyes are on this time and date. We expect the Euro to keep steady at a current rates until than.

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