Mario Draghi Says He Is Willing To Do More

The euro was steady at $1.2858 at 7:45 GMT on Tuesday morning after falling to a 14-month low on Monday as markets saw the European Central Bank’s policies diverging from those of the Fed.

On Monday, European Central Bank President Mario Draghi expressed his willingness to act in order to prevent deflation while speaking in Brussels.

Draghi said he the bank was planning to take a more active role in managing the region’s balance sheet by rolling out an asset purchase program.

Bloomberg reported that Draghi was open about his concern for the region’s economic data, saying that sky-high unemployment figures and a lack of credit growth are threatening to tear down the bloc’s recovery.

He noted that GDP stalled in the second quarter and admitted that the bloc’s most recent economic figures don't give any indication that the region’s slowdown is fading.

Related Link: Higher Mortgage Rates Could Boost Homebuilder ETFs

The bank will have a difficult decision to make when it comes to a large-scale asset purchase program. The ECB has already tried to inject funds into the financial system by offering cheap loans to banks, but only 82.6 billion euros were taken by the region’s financial institutions.

The central bank is set to offer further loans in December, when Draghi said the effects of the loan program will be more measurable.

Moving forward investors will be focused on PMI data from the eurozone for a better picture of the bloc’s economy. Most are expecting to see that the region’s manufacturing and service sectors failed to expand in September, further confirming the eurozone’s slowdown.

Next month, the ECB is expected to announce the details of a bond buying program in response to the bloc’s poor economic figures.