The €1.1 trillion euro injection
It has recently been announced that the ECB will take an unprecedented step and inject no less than €1.1 trillion euros into the European economy.
This quantitative easing measure intends to purchase €60 billion euros worth of bonds each month until (at least) September 2016.
This action is seen as being no great surprise to many online Forex investors who have stated that a stagnant European economy required an additional economic stimulus.
Obviously, this will have a rather dramatic effect upon the value of the euro in relation to other currencies.
Room for Investment or Watch and Wait?
While the entire purpose of QE is to enable European products to be more appealing to buyers abroad while encouraging individuals to borrow more from banks, there are others who wonder if this measure is only staving off a more significant downturn in a flailing European economy. However, there are many online Forex traders who instead see this as an excellent buy opportunity in terms of the euro.
It is already a foregone conclusion that this currency will take substantial hits against both the dollar and the pound. Therefore, there is a sizable chance that Forex investors could make impressive trading gains in the short-term forecast. However, another question nonetheless arises.
Just how far will the euro fall in relation to its foreign counterparts? This is difficult to answer and such a conclusion will be partially based upon the results of QE in the months ahead. If this method is seen to strengthen industrial and economic output throughout the EU block, there may very well be reasons to buy now in hopes of selling when the euro rebounds. Still, this will involve a more long-term investment strategy due to the fact that QE will be taking place for the next 18 months.
