The announcement of ECB meeting results has pushed Euro up, can we be seeing the end of quantitative easing in Eurozone soon?
No more mentioning of further increases in bond purchases from the ECB if there is a need for propping up the Eurozone.
The ECB has also shown the signs of willingness to bring to the end its massive stimulus programme by the end of September unless there is a necessity to
In the wake of the announcement the euro perked up slightly reflecting the positive and confident language of the ECB regarding 2018 prognosis.
The GDP growth has been revised and is set to be at 2.4%, compared to a previous forecast for 2.3%, while 2019 growth is still forecast at 1.9%.
“Growth in the euro area is projected to expand in the near term at a faster pace than expected,”
ECB President Mario Draghi
Draghi says strong momentum could lead to positive growth surprises, but downside risks relate to global factors and FX markets.
That’s the reason why the ECB is closely watching the exchange rate “with regard to their possible implications for the inflation outlook.” If Euro jumps up, the impact on European exports will be negative and it will also raise prices in the region. Should this happen, the Bank will have to adapt its monetary policy.