Will the ECB taper the quantitative easing program?

Over the last 6 months euro exchange rates have been gaining momentum agains most of the major currencies due to economic data across the bloc. Further more the President of the European Central Bank Mario Draghi has consistently commented about improved growth, which has lead many economists to ask when the quantitative easing program will be cut?

At the moment the European Central Bank quantitative easing program is running at €60bn. For new readers quantitative easing is the buying of government bonds but its known as printing money. A central bank ‘prints money’ in order to stimulate the economy, which by all accounts has been working. However if the central bank overprints this could have a negative impact long term.

Mario Draghi has made it clear that the bulk of the decision surrounding the Q.E program could be made in October and I was under the impression this could mean that the ECB will taper this month. However core inflation numbers fell on Friday to 1.1% from 1.3% therefore I expect the ECB to continue to monitor the Q.E program for another month. Therefore I expect the euro could lose some value this month.

When buying or selling the euro its important to analyse both currencies that you will be trading (EURGBP ,EURUSD, GBPAUD,) as different strategies should be used for different currency pairs. Even though the Euro could devalue this month there are some currencies that could weaken further which means holding off could be wise.

If you would like to save as much money as possible feel free to email me with the currency pair you are looking to trade and the time-scales you are working too and I will email you with my forecast and the process of using our company drl@currencies.co.uk

As a company we pride ourselves in the ability to get you a better exchange rate than your current currency provider or your bank. In addition we can outline your options and the potential future events, which will impact your exchange rate. This will help you to make informed and educated decisions.