The euro continued its downward trend against the dollar amid growing expectations that the European Central Bank (ECB) may soon implement quantitative easing (QE). This comes as policymakers grapple with persistently low inflation across the Eurozone.

Deflation Concerns Mount

Recent economic data has fueled concerns about the risk of deflation, prompting calls for the ECB to take decisive action. Inflation remains well below the ECB’s target of close to 2%, raising the specter of a prolonged period of low growth and falling prices.

ECB Weighing Options

The ECB is reportedly considering a range of options, including:

• Purchasing government bonds
• Offering cheap loans to banks
• Cutting interest rates further

The prospect of QE has weighed heavily on the euro, as investors anticipate increased money supply and potential currency devaluation.

Market Reaction

The euro’s slide reflects market sentiment that the ECB is increasingly likely to intervene to support the Eurozone economy. Analysts are closely watching upcoming ECB meetings for further clues about the central bank’s intentions.