2019-11-11 • Updated
To make it clear how the quantitative easing affects the euro, it is worth to start from the definition of it.
Quantitative easing (QE) is an unconventional monetary policy when a central bank buys government bonds to increase the money supply. Interest rate declines and a domestic currency depreciates against foreign currencies.
The European central bank launched the quantitative easing in January 2015 to stimulate inflation and GDP growth and succeeded.
There are reasons to believe that the central bank is going to close the quantitative easing program to the end of 2018 because of the positive dynamics of the European economy. Now it is purchasing the 30 billion euros worth government bonds, and it is going to continue until September considering the opportunity to expand it again if it is needed or end the program.
But some analysts suppose that the positive dynamics of the euro can support the sooner end of the QE. For example, analysts at Barclays argued for the end of QE in September and a first hike of the rate at the end of the year.
The economic world is waiting for the quantitative easing tapering and making forecasts about it because as soon as the central bank closes this program, the euro will appreciate against the dollar. We could see that even a small news about the prospects of the QE tapering led to the growth of the euro nearly to 0.8% against the dollar on Friday, January 12.
But not only news about the quantitative easing tapering led to the rise of the euro, and also negotiations in Berlin about a new coalition government that lowered political risks supported the euro growth. It is important to take all factors into consideration.
Making a conclusion, analysts are giving good chances to the euro. However, it is important to say that there are risks for the euro because the European central bank not always supports the growth of the euro that can reduce the European export.
Crude oil futures surged on Monday due to disruptions in Russian refining capacity caused by Ukrainian drone strikes and Moscow's decision to cut output to comply with OPEC+ targets. The West Texas Intermediate (WTI) contract for May settled at $81.95 a barrel, up $1.32, while the Brent contract for May settled at $86.57 a barrel, also up $1.32. Russia instructed...
Bearish scenario: Sales below 80.00 with TP1: 79.60... Anticipated bullish scenario: Intraday purchases above 80.70 with TP: 81.50...
Bearish Scenario: Sales below 78.99 with TP1: 77.93, TP2: 77.45, and upon its breakout TP3: 76.56 and TP4: 75.70 Bullish Scenario: Purchases above 78.00 (wait for a pullback to this area) with TP1: 1679.00 (uncovered POC*), TP2: 79.33, and TP3: 79.66 intraday
Jerome H. Powell, the Federal Reserve chair, stated that the central bank can afford to be patient in deciding when to cut interest rates, citing easing inflation and stable economic growth. Powell emphasized the Fed's independence from political influences, particularly relevant as the election season nears. The Fed had raised interest rates to 5.3 ...
Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.
Bearish scenario: Sell below 1.0820 / 1.0841... Bullish scenario: Buy above 1.0827...
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