A European Central Bank policy rate that targets 1.0% may not be so completely out of the picture, at least that is what one ECB Governing Council member is saying. In an interview with Bloomberg, the head of the central bank of Austria, Ewald Nowotny, stated that its my personal opinion that the benchmark rate should not go below 1%, but this is a point thats open for discussion.
Hinting at a move towards quantitative easing, Nowotny stated that it would be a sensible and efficient measure to have the ECB purchase corporate debt in an effort to ease credit conditions.
Currency markets reacted slightly, yet noticeably, to Nowotnys statement. The Euro fell 51 pips against the U.S. dollar in the 10 minutes preceding the publication of his remarks.