Today's edition of the Saxo Morning Call features the SaxoStrats team discussing the continuing weakness of the US dollar as commodity prices recover ground and in the wake of key US equity indices hitting all-time highs Thursday.
Article / 04 September 2014 at 13:15 GMT

ECB's Draghi revises down inflation forecast for 2014 to 0.6%

Former managing editor, / Saxo Bank
  • ECB cuts main financing rate to 0.05% from 0.15%
  • Draghi cuts inflation forecast for 2014 to 0.6% from 0.7%
  • Decision to cut rates was "not unanimous"

By Martin O'Rourke

European Central Bank president Mario Draghi followed the central bank's decision to cut the main financing rate from 0.15% to 0.05% Thursday by announcing the start of asset-backed securities purchases from October 2014.

Draghi said that the purchases would have a sizeable impact on the balance sheet indicating the bank decided to take action after a disappointing second quarter GDP for the Eurozone.

Draghi said markets should not "expect any further lowering of rates".

Draghi also revised down the inflation rate forecast for 2014 from 0.7% to 0.6% reviving deflationary fears that have stalked the Eurozone for much of the last year.

He also readjusted Eurozone GDP growth forecasts down for 2014, 2015 and 2016 respectively to 0.9%, 1.6% and 1.9%.

Draghi said the raft of decisions taken at the meeting which included a cut to the main financing rate was "not unanimous", adding that "some [ECB members] wanted to do less".

Markets reacted positively to Draghi's speech with the FTSE, CAC40 and DAX all trading up during the conference. The euro struggled against both the dollar and sterling and also hit its lowest level against the Swiss franc since November 2012.


Draghi: Markets should not "expect any further lowering of rates". Photo: Thinkstock

Martin O'Rourke is managing editor of
danevagirl danevagirl
This comment has been redacted


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail