We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Mixed
GBP/USD
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Mixed
Oil - US Crude
Mixed
Bitcoin
Bearish
More View more
Real Time News
  • $GBPJPY: Any close above 143.19 could embolden more market’s participants to push towards the vicinity of 144.80-94. Get your technical analysis from @malkudsi here:https://t.co/eYpmPx1pKg https://t.co/7g2rhlfzaB
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 98.09%, while traders in France 40 are at opposite extremes with 78.67%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/ZLq5jhfPrP
  • UK PM Johnson says failure to exit the EU has cause much bitterness $GBPUSD
  • Indices Update: As of 21:00, these are your best and worst performers based on the London trading schedule: France 40: 0.11% Germany 30: 0.07% US 500: -0.00% Wall Street: -0.00% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/qinDsU2Niv
  • Labour Leader Corybyn says it would not be possible for the UK to get a quick trade deal with the US accomplished $GBP
  • UK PM Johnson: - Choice for voting is between a Tory party majority or having a hung parliament - Tory Party is fully united on Brexit $GBPUSD
  • 🇺🇸 USD Consumer Credit (OCT), Actual: $18.908b Expected: $16.000b Previous: $9.579b https://www.dailyfx.com/economic-calendar#2019-12-06
  • The @UMich consumer sentiment report printed 99.2 this morning and helped propel a risk-on mood across markets while the $USD extended its intraday rally. Get your market update from @FxWestwater here:https://t.co/sVwGakRiY6 https://t.co/6z3JhITOsh
  • RT @LizAnnSonders: GDPNow for Q4 from @AtlantaFed now at 2%, at top end of #BlueChipConsensus https://t.co/1ds63mLqxH
  • 🇺🇸 USD Consumer Credit (OCT), Actual: 18.91B Expected: $16.000b Previous: $9.513b https://www.dailyfx.com/economic-calendar#2019-12-06
The ECB’s Monetary Policy Divergence

The ECB’s Monetary Policy Divergence

2014-12-23 00:46:00
Christopher Vecchio, CFA, Sr. Currency Strategist
Share:

We enter 2015 on the heels of pivots made by several of the major central banks: the Bank of England and the Federal Reserve are discussing rate liftoff timing; while the Bank of Japan, the European Central Bank, and the Swiss National Bank are all pushing for more aggressive easing measures.

This time is different, however. In years past, promises of pending stimulus had put a halt on the declines seen by the Euro at times (notably in July 2012 when ECB President Draghi made his now (in)famous “whatever it takes” comment), but the nature of the current decline in the Euro is different than those previously – context is important.

EURUSD

The ECB’s Monetary Policy Divergence

Now that peripheral sovereign bond yields are already low, so there is no latent ‘risk-relief rally’ potential. Coupled with plunging inflation expectations, by the end of 2014, the ECB was laying the ground work for a potentially massive balance sheet expansion in 2015. The oft-cited figure, a return to the early-2012 levels, would call for the ECB’s balance sheet to balloon by €500 billion to €1 trillion (current size is roughly €2.05 trillion; range for early-2012 was roughly €2.60 to €3.10 trillion).

If a wave of stimulus is about to come crashing down on the shores of the Euro-Zone, then the technical structures of two pairs stuck in the ECB’s policy divergence vacuum – EURGBP and EURUSD – could see significantly lower prices over the next 12-months.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.