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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
Australian Dollar softens despite weak USD, eyes on inflation data
The AUD/USD declined by 0.14% to 0.6495 in Monday's session, driven by selling pressure near the intraday high of 0.6550. Despite the US Dollar's weakness, the Australian Dollar's performance suggests its own underlying weakness.
EUR/USD scrambles to recover lost ground near 1.05
EUR/USD scrambled for higher ground on Monday, clipping back into the 1.0500 handle amid a broad-market relaxing of Greenback bidding as investors step back into a risk-on mood, albeit with limited impact.
Gold turns bearish and could test $2,600
After recovering toward $2,700 during the European trading hours, Gold reversed its direction and dropped below $2,650. Despite falling US Treasury bond yields, easing geopolitical tensions don't allow XAU/USD to find a foothold.
MicroStrategy set to push Bitcoin to new highs after 55,500 BTC acquisition, should investors be concerned?
MicroStrategy revealed on Monday that it made another heavy Bitcoin purchase, acquiring 55,500 BTC for $5.4 billion at an average rate of $97,862 per coin.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.