Here’s how the ecb got ‘stuck in the euro trap’ on its way to winding down qe usd into pounds

.

The eurozone economy is getting stronger, the deflation threat has disappeared, corporate earnings are growing, and optimism has taken hold in households and among businesses.

Sounds like the perfect time to announce the end of quantitative easing, when the European Central Bank meets for its highly anticipated meeting on Thursday, right? But there’s just one problem: the euro (XTUP:EURUSD) and its almost 15% rally this year to a more than two-year high against the dollar.

“The stronger euro has made the ECB’s taper tiptoeing even more complicated usd aud calculator. While a clear hint on tapering at this week’s meeting could send the euro even higher, potentially undermining the recovery, room to postpone tapering is limited due to bond scarcity,” Carsten Brzeski, chief economist at ING, said in a note.

Since ECB President Mario Draghi said in July that policy makers would discuss QE’s future “in the autumn,” analysts have speculated an announcement would come at the September policy meeting because it coincides with the new ECB staff forecasts.


The current program of buying €60 billion euros’ worth of bonds a month is slated to run until the end of the year, but the ECB has kept the door open for an extension.

Few people expect the central bank to end the bond-buying program altogether at the end of the year, but the question is how long it’ll be extended for and when the tapering will begin. Looking at the state of the economy, several factors suggest Draghi & Co. can take their foot off the QE gas pedal.

Second-quarter growth in the eurozone came in at 0.6%, pointing to growth above 2% for the full year. Not a single member state produced negative economic growth last quarter, and traditional laggards such as Italy, France and Greece appear to be on a more stable recovery path.

Additionally, while inflation is not as high as the ECB would like it to be, consumer prices are rising significantly faster than in recent years texas baseball. Headline inflation is expected at 1.5% in August, compared with 0.2% in August last year and the recent low of negative 0.6% in January 2015. The ECB’s annual inflation target stands near but just below 2%.

A stronger exchange rate is bad news for exporters as it means their products become more expensive for other currency holders, potentially leading to slower sales and thus slower economic growth.

Because imports becomes cheaper, a rising euro can also lead to weaker inflation, which is one of the ECB’s biggest concerns python examples. A 10% appreciation in the euro versus the dollar could take 30 basis points, or 0.3 percentage point, off the inflation rate over the next six quarters, according to Société Générale.

A Reuters report last week said the rising euro is worrying more policy makers, leaving an announcement on QE tapering at Thursday’s meeting highly unlikely. The report said an announcement might not be ready until December.

The report came just a few days after the shared currency climbed above $1.20 for the first time since January 2015 exchange rate myr to usd. The ECB is not mandated to target the exchange rate, but some analysts are growing frustrated that the central bank won’t admit that’s exactly what it is trying to do fraction worksheets free. The euro traded at $1.1980 on Thursday, up from $1.1917 late Wednesday in New York.

“Just as Mario Draghi and his colleagues at the ECB were watching in disbelief as euro-dollar headed back towards $1.20 and looked like easing past it, ‘ECB sources’ came to the rescue and the move was quickly reversed,” said Craig Erlam, senior market analyst at Oanda, in a note.

“This may be the skeptic in me, but it would seem the central bank is paying far too much attention to its FX rate and may now even be planning its tapering announcement around it, or at least using it as a tool to hold back the currency,” he added.

The problem for the ECB is, however, that they can’t keep buying eurozone bonds forever. Regardless of the strength of the economy, the bank is simply close to running out of eligible paper to buy, which makes some kind of tapering almost unavoidable in 2018, according to Brzeski from ING.

Apple has accidentally confirmed the name of the new iPhone. The three new handsets will be referred to as the iPhone 8, the iPhone 8 Plus and the iPhone X, according to secret software that appears to have been mistakenly made available to the public aud usd rate. The same leak has revealed a range of other secret features of the new iPhone.

Eric Chase Bolling, son of former Fox News host Eric Bolling, reportedly died on Friday night, shortly after Fox News announced it would be ending its relationship with his father binary multiplication examples. Eric Bolling’s son, who went by “Chase” on Facebook, was his only child. According to Chase Bolling’s Facebook profile, he was studying economics at the University of Colorado at Boulder.

The most fascinating thing on the internet right now is a livestream of the continental United States’ southernmost point, located in Key West, Florida binary search algorithm. On a normal day you can see people taking selfies next to a big anchored concrete buoy in front of a placid ocean; today, as “the most catastrophic storm” in Florida’s history nears landfall, you can see people taking selfies near an increasingly violent ocean. Hopefully, better judgement will soon prevail among the denizens of Key West, and the livestream will transition to an interesting place to watch the sea level rise, hurting no one binary chart. Let’s be clear: this is immensely dangerous and anyone in the area should immediately seek shelter. But,

Florida Gov. Rick Scott has urged citizens to “get out” as Hurricane Irma approaches his state convert rm to usd. In a bid to help some evacuees find shelter, home-sharing site Airbnb has compiled a database of its hosts who are willing to open up their doors for those displaced by the oncoming natural disaster. “We are looking to host people displaced by Hurricane Irma,” wrote Daniel of Atlanta who is offering one bedroom.

North Korea’s "reckless behavior" is a global threat and requires a global response, the head of the NATO military alliance said on Sunday. NATO has not been directly involved in the crisis, which saw Pyongyang carry out its sixth and most powerful nuclear test a week ago, but has repeatedly called on North Korea to abandon its nuclear and ballistic missile programs. "The reckless behavior of North Korea is a global threat and requires a global response and that of course also includes NATO," NATO head Jens Stoltenberg said in an interview with BBC television.

As this weekend passes, we may learn that North Korea has launched more missiles or some such, this time to celebrate its 69th anniversary. Then again, there has been little correlation between key anniversaries and its weapons tests; instead, Pyongyang seems more intent on spitefully ruining long weekends and international meetings. Launch or not, rest assured Pyongyang will continue to evade sanctions, advance its weapons technology, and threaten its enemies, especially the US. (And, oh yes, sell arms.) To many Americans, it’s puzzling that North Korea is trying to intimidate the US with its ballistic missile launches and nuclear weapons tests, including its sixth and most powerful last weekend.

It is difficult to remain in business when Sears needs to cut expenses and does so by closing stores, when those stores are also a primary source of revenue. The upside is that fewer stores also means less inventory to keep in stock, which means less money spent on that inventory, which means cash flow will improve. Now, with Sears effectively outsourcing the sale of its Kenmore appliances to Amazon.com, Inc. (NASDAQ:AMZN), margins will be reduced further, because online sales at Amazon tend to carry lower margins.

Equifax, one of the three credit reporting agencies in the US, announced that it was hacked between mid-May and July, potentially exposing Social Security numbers, credit card numbers, and other personal information for up to 143 million Americans. A breach of this size is a massive challenge for any company, and Equifax certainly hasn’t handled it well so far. On top of everything, the company’s chief financial officer and two other senior executives cashed in on almost $2 million of Equifax stock once they learned about the hack, reported Business Insider’s Mohammed Hadi and Bryan Logan.


banner