The euro tumbled more than 6.0% between October 15 and November 9 after the European Central Bank (ECB) signalled that it was prepared to do more in December to bring inflation back to its ‘just below 2.0%’ target. Soft indicators for Q4, along with fears about lower German exports and a migrant crisis, have cast doubt on the 2016 outlook. Hints of additional stimulus from the ECB reflect unease about the stop-start recovery, which has proved inadequate to lift medium-term inflation expectations. In terms of possible measures that could be unleashed, the ECB has proclaimed that all options are being considered, including deeper reductions in the deposit rate and an expansion or extension of its program of bond purchases. While the ECB does not target a specific value for the US$/€ exchange rate, the possibility of further divergence in the rate cycle with the stronger US economy is a significant weight on the euro.