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Modest EUR relief rally continues - BTMU

FXStreet (Łódź) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ observes that EUR/USD continues to climb after bouncing off support at the 1.2500 at the beginning of October.

Key Quotes

"Euro selling pressures have eased in the near-term alongside dampened expectations for monetary tightening from the BoE and Fed which has helped narrow expectations for monetary policy divergence with the ECB in the year ahead The ECB has already committed to a “sizeable” expansion of its balance sheet through TLTROs and private asset purchases."

"The ECB confirmed that it began purchasing covered bonds yesterday and will reveal how much it purchased every Monday afternoon. The purchases of ABS are expected to begin later this year. Still with downside risks to inflation and growth in the euro-zone continuing to build, the ECB remains under pressure to deliver further easing which if delivered could trigger renewed euro weakness."

"French and German finance and economy ministers also pledged yesterday to help support economic growth in the euro-zone through boosting investment."

"German Economy Minister Gabriel stated that Germany was developing plans to help raise the share of investment as a % of GDP from 17% to 20% by promoting private investment which would bring it into line with the average for OECD members."

"French Finance Minister Sapin stated that each euro-zone member state must spell out by the end of year how it plans to boost investment with more specific proposals expected to be presented by early in December."

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