Reactions continue flowing after the ECB announced a large QE program that could exceed one trillion euros.
The euro already lost several big figures but could lose many more: the team at TD sees ongoing pressure on the common currency and set a very low target for EUR/USD at year end:
Here is their view, courtesy of eFXnews:
The ECB has left their tepid convictions on asset purchases, and especially government bonds, in the rear view mirror, notes TD.
“They have now firmly committed to buy €60bn per month across ABS, covereds, government, corporates, and European agencies until end-September 2016 and beyond until inflation is consistent with target,” TD adds.
“The ECB did reiterate that interest rates are at the lower bound which will keep the focus on asset purchases only. And the ECB did finally sweeten the remaining TLTROs by removing the 10bps spread off of refi that was included in the first two. But what is crucial is that the ECB has moved further along the spectrum to doing whatever it takes to hit their target. That means euro lower until further notice,” TD argues.
“This reinforces EURUSD as the stress reliever to any further macro disappointment and we revise our target and see EURUSD falling to 0.96 by end-2015,” TD projects.
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