EUR/USD: QE restart doesn’t quash Euro - CIBC

Analysts at CIBC see the EUR/USD pair rallying in 2020 despite the new open-ended QE program from the European Central Bank (ECB) announced on Thursday. 

Key Quotes: 

“Outgoing ECB President Mario Draghi made his final roll of the dice this week, cutting the deposit rate further 10bp and restarting QE bond purchases. With no end date given for those purchases, the euro initially weakened, only to rally later on as investors realized that the scale of stimulus was fairly small and as such fiscal policy will be more important going forwards. In fact, at the instated 20bn euro a month pace, it would take around 12 years for the current QE programme to inflate the ECB’s balance sheet as much as the 2015-18 version of QE did.”

“A greater leaning towards fiscal rather than monetary policy is generally positive for that country’s currency, and we see the euro rallying versus the US$ in 2020 as a result.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD tension remains elevated ahead of the Fed

EUR/USD is trading around 1.1050, confined to a narrow range ahead of the all-important Fed decision. Chair Powell is set to cut rates by 25bps but signal no further stimulus is on the cards.


GBP/USD extends its falls to 1.2450 amid weak UK inflation, Brexit impasse

GBP/USD has dropped to around 1.2450 as UK headline CPI missed with 1.7% in August. Brexit negotiations remain stuck according to Chief EU negotiator Barnier. The Fed decision is eyed.


USD/JPY holds on to recovery gains above 108.00 ahead of Fed

Not only upbeat trade numbers from Japan but upbeat trade/political headlines also help the USD/JPY pair to remain firm around 108.20 prior to Wednesday’s European session. Focus on FOMC decision.


Gold: Pivots around $1500 mark, awaits FOMC policy update

Gold extended its sideways consolidative price action through the early European session on Wednesday and was seen pivoting around the key $1500 psychological mark, awaiting FOMC policy decision.

Gold News

Top 3 price prediction Bitcoin, Ripple, Ethereum: Cryptos seeing multiple launches into the universe

The Altcoin market has quickly confirmed Tuesday’s analysis with flashing rises in the last 24 hours. The two eternal aspirants to lead the crypto market – Ethereum and XRP – are rising sharply against Bitcoin and increasing its value rapidly.

Read more