The European Central Bank is prepared to resume its money-printing programme, according to its vice-president Luis de Guindos.
Meanwhile, the euro tumbled to 22-month
lows against the dollar late last week, as US growth data remains robust
both in terms of capital goods investment and real wage growth.
With decelerating growth and inflation
in the Eurozone, de Guindos reignited speculation about the continuation
of a €2.6 trillion bond-buying programme that officially ended in
December 2018. Meanwhile, the forthcoming European elections in May are
weighing negatively on the Eurozone’s economy, as markets expect a surge
in euro-critical movements.
“Quantitative easing is something that
we can use again if needed,” de Guindos told an audience in New York,
although he made clear that the resumption of bond-purchases beyond the
current levels has not yet been discussed. Officially, the ECB projects a rebound
in Eurozone growth during the second half of 2019, but De Guindos’
announcement consolidates the overall impression that a prolonged period
of subdued growth may be ahead.
Read more: ECB braces for more money printing
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