ECB to Restart Open-Ended Bond-Buying Program at €20 Billion Monthly
The European Central Bank (ECB) announced Thursday morning that they are lowering their deposit rate from -0.4% to -0.5%. Additionally, they will be restarting their quantitative easing (QE) bond-buying program in November at a scale of €20 billion per month.
They also gave aggressive forward guidance that their QE bond-buying will be “Open Ended,” meaning it will continue until inflation in the Eurozone hits or gets very close to +2%.
“The governing council expects them to run for as long as necessary to reinforce the accommodative impact of its policy rates,” the ECB said in a statement.
The statement on the action has already sent the Euro convincingly below the 1.10 Euro/$US benchmark, even before the Q&A press conference this morning. However, it is still above the lows for the year in 2019.
While the trade is a very fluid market, 15 minutes in advance of the Draghi presser, the Euro is trading at 1.0968 to the US$$. The low for the year in 2019 is Euro 1.0926 to the US$$, certainly a level everyone will be watching closely should their be a sharper sell off.