The value of the euro weakened ahead of the ECB rate decision with EUR/USD dipping under 1.23. Does this imply that Quantitative Easing is already baked into the price? The team at Goldman Sachs explains why the price of the pair is far from reflecting QE: Here is their view, courtesy of eFXnews: Goldman Sachs expects the ECB to stay on hold at its December policy meeting on Thursday (ECB Main Refinancing Rate at 0.05%), and doesn’t expect further specific measures to be announced. That said, GS believes that President Draghi will likely reinforce the dovish stance adopted in his Frankfurt speech on November 21. “Our European economists saw ECB President Draghi’s dovish speech on November 21 as signalling sovereign QE from the ECB, with a magnitude of at least €500bn (and likely closer to €1tn),” GS projects. In that regard, given the sharp EUR/USD decline since this speech, some market players now believe that QE is already priced in. GS strongly strongly disagrees. To make its case, GS discusses a round of analytical approaches, all of which are rough benchmarks and are hardly conclusive, such as the QE experience in the US and its impact on the USD. “That said, they point to substantial downside for EUR/$ from here (we think at least 10 big figures), in line with our 12-month forecast of 1.15,” GS argues. “In our minds, sovereign QE is therefore far from priced in and Euro downside remains our strongest conviction. Much of this view rests on the ECB, although this week’s Fed speakers have also been a reminder of the cyclical divergence between the US and the Euro area, which is another factor supporting of our view,” GS adds. For lots more FX trades from major banks, sign up to eFXplus By signing up to eFXplus via the link above, you are directly supporting Forex Crunch. Yohay Elam Yohay Elam Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts. Yohay's Google Profile View All Post By Yohay Elam Forex News Today: Daily Trading News share Read Next ECB Preview: A big step towards QE? 3 scenarios Yohay Elam 8 years The value of the euro weakened ahead of the ECB rate decision with EUR/USD dipping under 1.23. Does this imply that Quantitative Easing is already baked into the price? The team at Goldman Sachs explains why the price of the pair is far from reflecting QE: Here is their view, courtesy of eFXnews: Goldman Sachs expects the ECB to stay on hold at its December policy meeting on Thursday (ECB Main Refinancing Rate at 0.05%), and doesn't expect further specific measures to be announced. That said, GS believes that President Draghi will likely reinforce the dovish stance adopted in his… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk. 4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk. 5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.