ECB Analysis: Why Lagarde's short-term fix is lose-lose for

ECB Analysis: Why Lagarde's short-term fix is lose-lose for the euro


Mar 12, 2021 08:33 GMTOpinions
The ECB has left its policy unchanged and vowed to ramp up bond-buying next quarter.
Potentially lower European yields may weigh on the currency.
The lack of commitment to longer-term support means fewer funds for the economy. 
Christine Lagarde’s largesse is gone – at least for the long-term – and that is bad news for euro bulls. European Central Bank President Christine Lagarde has overseen an announcement to expand bond-buying in the second quarter.
That pledge has come after the bank surprisingly purchased fewer bonds in recent weeks – a surprise given officials’ complaints about rising yields. If the bank indeed ramps up its bond-buying activities and returns on debt fall, that could weaken EUR/USD. On the other side of the Atlantic, the Federal Reserve accepts higher yields as a sign of better growth prospects.

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