News & analysis
News & analysis

Europe’s Bond-Buying Program

7 September 2017 By GO Markets

Share

The European Central Bank (ECB) engaged into a €2 trillion bond buying program to promote economic growth and drive inflation up in the Eurozone.
It involves buying assets from commercial banks to inject more funds in the banking system. It is a non-standard monetary policy commonly referred as quantitative easing (QE).
The market expected the QE to be phased out by the end of this year. Key ECB policymakers are expressing concerns over a strong Euro which is putting months of challenging work into jeopardy.
A strong Euro will directly hurt Germany, one of the largest economy in the Eurozone, as higher export costs will translate into lower demand. On the other hand, the Pound will eventually benefit from it as euro buyers could switch to pound.
The exchange rate has therefore become an issue as ECB is unable to maintain the desired inflation rate. Given the concerns over the strong euro, the market foresees that ECB is less likely to exit from the QE phase.
After more than 2-year high, the EURUSD dropped. The selloff was also due to strong economic US data during the week and the comeback of the tax reforms talks in the White House.

EURUSD
Source: GO Trader MT4

 
 

Mark your calendar!!!!

The ECB Monetary policy statement and press conference is scheduled on the 7th of September 2017. It will be a key event for the Euro.
 

By: Deepta Bolaky
GO Markets

Ready to start trading?

The information provided is of general nature only and does not take into account your personal objectives, financial situations or needs. Before acting on any information provided, you should consider whether the information is suitable for you and your personal circumstances and if necessary, seek appropriate professional advice. All opinions, conclusions, forecasts or recommendations are reasonably held at the time of compilation but are subject to change without notice. Past performance is not an indication of future performance. Go Markets Pty Ltd, ABN 85 081 864 039, AFSL 254963 is a CFD issuer, and trading carries significant risks and is not suitable for everyone. You do not own or have any interest in the rights to the underlying assets. You should consider the appropriateness by reviewing our TMD, FSG, PDS and other CFD legal documents to ensure you understand the risks before you invest in CFDs. These documents are available here.

#Indice #Indices #IndicesTrading #IndexTrading #Shares #Stockmarket #Stocks