ECB should lengthen QE purchases to counter strong euro – IIF
|EUR/USD has gained nearly 2% this quarter despite the resurgence of coronavirus across the Eurozone. The common currency's resilience puts downward pressure on inflation and is a cause for concern for the European Central Bank (ECB).
According to Robin Brooks, Chief Economist at the Institute of International Finance (IIF), the central bank should lengthen the duration of its quantitative easing or asset purchase program to outdo the US Federal Reserve (Fed) and push the EUR lower.
"Basic issue is that the Fed out-eased the ECB," Brooks tweeted while adding that the central bank should not cut the deposit rate and refrain from talking about the exchange rate.
Interest rates on the ECB's main refinancing operations, marginal lending facility, and deposit facility remain at 0.00%, 0.25%, and -0.50%.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.