The Euro is about to drop against other major currencies, such as the USD, JPY and GBP. EUR has performed well as a safe haven, along with the JPY, as it has become the low inflation currency of choice for investors looking to safeguard their wealth.
However, this demand for the Euro may reduce quite significantly over the next few weeks. After ECB President Mario Draghi’s speech on the interest rate decision last Thursday, more information has been released through the ECB meeting’s minutes, that the EU will recommence Quantative Easing (QE) in the near future. The central bankers are simply unsure as to how to make their expansionary monetary policy effective, as GDP growth, along with price inflation, has remained stagnant in the economic bloc.
These sentiments do little to dissuade investor’s lack of confidence in the European Central Bank. Coupled with the expansionary policy, we should see the Euro decrease in value against the other major currencies. Keep an eye out for the type of monetary policy implemented by Draghi, and how it could affect your currency holdings.