A recent media report from Bloomberg suggested that the European Central Bank was likely put an end to its monthly bond purchases (of some €80 billion) before the cessation of the formal Quantitative Easing program. For analysts, that was an indication that the ECB could likely follow in the footsteps of the Federal Reserve with gradual tapering as opposed to a swift cessation. That report has now, however, been confirmed by the ECB, as the central bank’s media office had tweeted that this particular possibility had not yet been discussed by the policymakers.
As reported at 10:42 am (BST), the EUR/USD was trading higher at $1.123, a gain of 0.22%; the pair had earlier hit a session low of $1.196 and is currently nearing the daily peak of $1.128. The EUR/GBP pair was up by a similar measure, trading at 0.8825 Pence, a gain of 0.22%; the pair had earlier hit a peak of 0.8842 Pence.
Across the pond, hawkish comments by some Fed officials suggested that the Fed might be considering a year end rate hike which pushed the US Dollar higher. Charles Evans, the president of the Chicago branch of the Federal Reserve, said that provided economic data continued to be solid, a rate increase would be “fine.” According to the FedWatch tool, FX traders have priced in a 63% likelihood of a December rate increase.