Back
23 Jan 2015
ECB QE may lead to more stimulus by PBoC and BoJ – Rabobank
FXStreet (Barcelona) - Jane Foley, Senior Currency Strategist at Rabobank, is of the opinion that a weaker euro might not appeal to the Asian countries with Europe being their major export market, and that the QE might increase chances of further stimulus by the PBoC and the BoJ.
Key Quotes
“Given that Europe is an important export market for many Asian countries, the impact of the weaker EUR is unlikely to be welcomed with open arms there. The BoJ refrained from adjusting the size of its huge asset purchases plan at this week’s policy meeting, but the threat of further action has been left on the table and further moves lower in EUR/JPY is likely to increase this risk.”
“Similarly the EUR/CNY exchange rate move may have some bearing of the decisions of the PBoC to announce more stimulus, while the pressure on EUR/GBP adds weight to our view that the BoE will not be hiking rates this year.”
“Next week, the FOMC meets. The sharp move lower in EUR/USD increases the chances of a more dovish message from the Fed. This raises the chances of some USD dips and could mean that a move to EUR/USD1.10 is further away than it currently seems.”
Key Quotes
“Given that Europe is an important export market for many Asian countries, the impact of the weaker EUR is unlikely to be welcomed with open arms there. The BoJ refrained from adjusting the size of its huge asset purchases plan at this week’s policy meeting, but the threat of further action has been left on the table and further moves lower in EUR/JPY is likely to increase this risk.”
“Similarly the EUR/CNY exchange rate move may have some bearing of the decisions of the PBoC to announce more stimulus, while the pressure on EUR/GBP adds weight to our view that the BoE will not be hiking rates this year.”
“Next week, the FOMC meets. The sharp move lower in EUR/USD increases the chances of a more dovish message from the Fed. This raises the chances of some USD dips and could mean that a move to EUR/USD1.10 is further away than it currently seems.”