Dovish bankers show support for easing euro

TWO OF the more hawkish members of the European Central Bank (ECB) governing council hinted at further monetary easing yesterday, mentioning negative deposit rates and outright quantitative easing (QE).

Jens Weidmann of Germany’s Bundesbank said first that QE was not “out of the question”, having previously questioned whether it would be legitimate for the ECB.

Finland’s Erkki Liikanen also told the Wall Street Journal that the potential for the ECB setting a negative deposit rate “isn’t any longer a controversial issue”.

The euro dropped following the remarks, falling to below £0.835 during the day, before paring some losses later in the day, when it became clear that ECB president Mario Draghi’s own speech yesterday afternoon contained no new policy announcements.

Political strife in Crimea has hit business confidence in Germany, the Ifo Institute said yesterday. Its widely-regarded business climate index fell to 110.7 this month, from 111.3 in February. France had better news, with official statistics reporting a slight improvement in the business climate in March.