European Central Bank chief Mario Draghi will not “hesitate to act” if Eurozone inflation

He hinted at the possibility of adjusting the size, composition and duration of the ECB’s asset purchase programme, to add monetary policy impetus if necessary.

A number of major banks have returned to their mantra of calling for a weaker euro in the past week, arguing that an extension of the ECB’s easing programme will coincide with a rise in official USA interest rates.

The British pound strengthened to its highest level in a month versus the euro on Monday as a outcome of growing expectations that the European Central Bank will ease policy further.

In a notice, the US Federal Energy Regulatory Commission (FERC) has accused French oil company Total SA of manipulating the price of natural gas in the USA southwest by making “uneconomic trading” in order to affect index prices on at least 38 occasions between June 2009 and June 2012. The overall Eurozone composite flash PMI came in slightly below forecasts at 53.9. and down from August’s 54.3.

Volkswagen’s chief executive Martin Winterkorn has resigned after the carmaker admitted it rigged United States air pollution tests in diesel cars. Volkswagen is endeavouring to prevent the scandal from spilling outside of the US.

Singapore, Malaysia and Indonesia are closed for a holiday while Japan returns from its five-day long weekend. Draghi’s comments echo sentiment expressed by Governing Council members Ewald Nowotny and Bostjan Jazbec, who both said earlier Wednesday that it’s too early to judge whether expanding purchases would be appropriate. Alfonso has also worked as a professional currency trader focused on North America and emerging markets.

Risk off tone in Asia caused volatilities to get paid especially in JPY crosses.

There are signs that the modest euro-area recovery needn’t wilt just because of financial-market turmoil and a Chinese slowdown. Two-week AUDJPY risk reversals was paid at 4.0.

Ebury Partners, the most accurate euro-sterling forecaster in Bloomberg’s second-quarter rankings, says it is considering raising its short-term estimates versus the dollar because the Fed’s rate decision will not delay the BoE.

“But monetary policy can only do so much“.

The late recovery in Asian equities helped support European bourses, although initial gains were pared back later in the session. The 2.15% security, due in October 2025, declined 0.12, or €1.20 per €1,000 face amount, to 101.655. Among precious-metal funds, the Market Vectors Gold Miners ETF was down 0.52% to 13.29 while SPDR Gold Shares was up 0.56% to $108.39.