ECB’s Rehn: It makes sense to continue with rate cuts

• By the middle of summer, we should be leaving restrictive territory
• The direction of rates is clear, growth outlook has weakened
• There are plenty of concerns on geopolitical developments
• Exchange rate has an impact on inflation but ECB has no policy target on currency

This just serves to reaffirm the diverging paths between the ECB and the Fed at the moment. Rehn’s comments are consistent with the outlook for the central bank as we start the new year.

This article was written by Justin Low at www.forexlive.com.