The euro plunged against almost all the G10 basket and the EUR/USD pair sank 1.5% after the announcement that ECB cut its QE buying program at the half for the next year. The U.S. dollar boosted from more than 40-year low jobless claims and the USD/CAD pair exposed to three-month high, while it hit our recommended target.
Euro Crashed as ECB Halved QE Program
Euro crashed on Thursday following ECB’s decision to slash its bond-buying program by half to €30 billion every month of 2018. The program was intended to end on December 2017 with the monthly amount of €60 billion pumped into economy. But now, the central bank extended it at least until September of the next year. The primary aim of the Quantitative Easing program was to erase deflation and boost employment. Moreover, they left interest rates unchanged at 0.00%, marginal lending facility at 0.25% and deposit rate at the record low of -0.40%. However, ECB President Mario Draghi expressed his concerns for various financial issues including low inflation rate. Euro area is expected to have inflation rate below ECB’s 2% target for the next few years.
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