Markets have, for quite a while now, been speculating the ECB will have to take some extraordinary steps to ward off a deflationary spiral that would threaten...

Markets have, for quite a while now, been speculating the ECB will have to take some extraordinary steps to ward off a deflationary spiral that would threaten the fragile Eurozone recovery. While the conversation to date has been about the possibility of negative interest rates following last week's ECB meeting it is turning towards a rumoured 1 trillion Euro quantitative easing program. The response? There hasn't been much at all really with the Euro losing only 0.5% against the US dollar since last Thursday's ECB meeting. In fact the EUR/USD, the world's most heavily traded currency pair, is sitting less than 2% away from its highest level in 2 ½ years and just 0.41% below where it began 2014. Now this could be because the markets don't believe the speculation yet, but if they do it becomes more likely the Euro could be in for some very tough times. (VIEW LINK)