Forex Analytics: EUR/USD: what to expect next week?
12 December 2014
Last week the markets were focused on the ECB’s TLTRO auction that took place on Thursday. In December European banks took 129 billion of cheap loans. The figure is above the September reading of 83 billion, so the market reaction was mildly positive. However, this is far below the minimum level of 200 billion needed to help the ECB to expand its balance sheet by 1 trillion euros.
As a result, the long-term sentence to the euro has finally been pronounced: euro zone clearly needs a QE program to beat the dangerous deflationary pressure. This is a long-playing euro-bearish factor.