ECB announces reduction in policy stimulus in 2018

The European Central Bank stated during today’s meeting that it will purchase net assets for EUR 30 billion per month as of January until September 2018 or beyond. This is consistent with median survey expectations. The material change in today’s monetary policy decision was the reduction and extension of the asset purchases. The longer extension by 9 months mostly aims at pushing out expectations for a rate hike.

The ECB kept two important dovish elements unchanged by maintaining the forward guidance and the dovish QE bias. The door continues to be open for an additional extension if the ECB feels a need, and there might be some ammunition left even with unchanged purchasing criteria, stated Nordea Bank in a research report. Today’s monetary policy decision will continue to underpin companies and private households significantly for a long time.

“This is not at all the end of easy money but just a step in this direction”, said Nordea Bank.

At 14:00 GMT the FxWirePro's Hourly Strength Index of Euro was bearish at -84.192, while the FxWirePro's Hourly Strength Index of US Dollar was highly bullish at 157.914. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest