Currency Wars: ECB Hints At Rate Cuts, Trump Slams Draghi In Tweetstorm

President Trump pointed the finger at ECB president Mario Draghi in a Tweetstorm blast.

Unfair! Unfair!

Unfairly Easier

What the Hell Does This Even Mean?

Also, the statement is in quotes, but Trump is the source.

Currency War Fears

MarketWatch reports ‘Currency war’ fears rise as Trump slams Draghi’s hint at more ECB stimulus

Tweetstorm Trigger

The Wall Street Journal reports ECB Signals Possible Rate Cut Prompting Trump Tweets.

Mr. Draghi said Tuesday that ECB policy makers would consider in the coming weeks how to adapt their policy tools “commensurate to the severity of the risk” to the economic outlook. Options include extending the time frame before the next interest-rate increase, a reduction in the already negative policy rate or restarting bond purchases.

Asked in an interview with ABC News’s George Stephanopoulos about whether criticism of Fed Chairman Jerome Powell could undercut Mr. Powell’s credibility, Mr. Trump said, “Yes, I do. But I’m gonna do it anyway.”

Investors responded favorably to Mr. Draghi’s remarks, sending the euro down by more than half a cent against the dollar, to $1.1187. Yields on 10-year German government bonds fell to a fresh all-time low of minus 0.315% as investors digested the prospect of fresh bond purchases by the ECB. French 10-year yields dropped sharply and hit 0%, their lowest ever.

“The rate-cutting genie is out of the bottle,” said Bart Hordijk, FX market analyst at Monex Europe. “This opens the trapdoor to lower levels” of the euro against the dollar.

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