26 Nov 2014
Constancio weighs on EUR – TDS
FXStreet (Barcelona) - The TD Securities Research Team note that the EUR/USD pair is trading lower in the NA session due to ECB Vice President Constancio’s comment on the possibility of the ECB buying sovereign bonds in the secondary market.
Key Quotes
“The USD has advanced overnight, paring back some of the losses it sustained yesterday. EURUSD is traded lower ahead of the NA opening on the back of comments by ECB Vice President Constancio, who noted that the central bank would gauge the progress achieved with its most recent measures in increasing the size of its balance sheet, and, if necessary, they could buy sovereign bonds in the secondary market.”
“He added that buying would be done proportionally to the capital key contributions by each Eurozone member state to the ECB. This would, according to Constancio, influence inflation expectations and the exchange rate. “
“Constancio’s comments are at odds with Bundesbank President Weidmann yesterday emphasizing the legal hurdles to sovereign bond buying by the ECB, but fall in line with Draghi’s speech of last week."
"This highlights that the ECB will be keen to keep up the rhetoric in order to put downward pressure on the EUR while they assess the impact of their battery of measures.”
Key Quotes
“The USD has advanced overnight, paring back some of the losses it sustained yesterday. EURUSD is traded lower ahead of the NA opening on the back of comments by ECB Vice President Constancio, who noted that the central bank would gauge the progress achieved with its most recent measures in increasing the size of its balance sheet, and, if necessary, they could buy sovereign bonds in the secondary market.”
“He added that buying would be done proportionally to the capital key contributions by each Eurozone member state to the ECB. This would, according to Constancio, influence inflation expectations and the exchange rate. “
“Constancio’s comments are at odds with Bundesbank President Weidmann yesterday emphasizing the legal hurdles to sovereign bond buying by the ECB, but fall in line with Draghi’s speech of last week."
"This highlights that the ECB will be keen to keep up the rhetoric in order to put downward pressure on the EUR while they assess the impact of their battery of measures.”