ECB’s Vasle: Likely need for further action

The European Central Bank (ECB) Governing Council member Bostjan Vasle said in an interview aired on Radio Slovenia last Sunday, the central bank will likely have to take more action “in the coming months, quarters and years,” per Reuters.

Key Quotes:

there were “big uncertainties, risks ahead of us” which included U.S. economic policy which he said was destroying the system of free international trade, a potentially hard Brexit and the economic slowdown in China.

There were signs that economic slowdown (in the euro zone) would last longer than the bank had expected at the start of the year, but: “we are not talking about a fall of economic growth or a recession”.

The actions of the central bank (ECB) ... have worked. They eased the conditions on the financial markets, increased demand and price growth.  So for now we are keeping our present strategy.

The ECB was also expecting governments to adjust their fiscal policies to the new economic conditions.

Despite the dovish comments from the ECB policymakers, the EUR/USD pair holds the upside above the 1.10 handle, helped by falling Treasury yields.