The Eurozone’s single currency fell to its lowest value in nearly a decade today amid suggestions that the European Central Bank (ECB) may resort to quantitative easing.
The Euro tumbled to a value of just $1.1860 before the markets opened this morning - its lowest point since 2006.
Fears over the currency’s future were exacerbated by an article in Germany’s Der Spiegel newspaper, which claimed that Germany was preparing for Greece to leave the common currency. The anti-austerity party Syriza has soared in popularity this month – if it wins the election, this could undermine existing bailout agreements and strengthen arguments for the country to abandon the Euro.
ECB chief Mario Draghi has refused to rule out the threat of euro deflation, warning that “we have to act against such risk.” Many have seen this as a sign that the central bank will follow the lead of the UK, US and Japan by buying up government bonds, adopting a policy of quantitative easing.
