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This is not good for global growth and fuelled growth concerns even further. The USD regained some ground, helped by EUR/USD weakness after Mario Draghi hit the wires with his usual ‘whatever it takes’ rhetoric. Mr Draghi said an expanded purchase program could include government bonds (which is what investors always want to hear) and added the economic outlook is increasingly sobering.
His emphasis that the governing council was unanimous in its support was significant, given recent rumours suggesting he was growing increasingly unpopular in his camp. The ECB also seems to be ramping up its covered-bond purchases after rising to about €10.485 billion last week. EUR/USD slipped back below $1.2500 and the current momentum could see it retest November lows around $1.2358. I feel any moves back into the $1.2500 region could be a good opportunity to initiate shorts.