FXStreet (Edinburgh) – Lee Hardman, Currency Analyst at BTMU, assessed the potential impact of lower commodities prices on the ECB’s QE programme.
Key Quotes
“Renewed weakness in commodity prices which have fallen to new cyclical lows may also have an impact on ECB policy arguing in favour of looser policy to help inflation return to target”.
“As inflation expectations are already uncomfortably low, the ECB is likely to be more sensitive to downside risks to the inflation outlook”.
“In their annual report yesterday, the IMF recommended that the ECB should be prepared to extend asset purchases beyond September 2016 which they view as “likely” as “inflation takes longer to come back”, and expand the range of assets its purchases”.
“The continuation of aggressive ECB easing should remain a weight on the euro in the year ahead”.
(Market News Provided by FXstreet)