What Will The ECB’s QE Strategy & US NFP Announcements Mean For The EURUSD?

What Will The ECB’s QE Strategy & US NFP Announcements Mean For The EURUSD?
November 30, 2014

As we leave November and look back, we can see that the main theme that governed trading in November are likely to be seen in December.

Thursday’s ECB (European Central Bank) meeting should be at the top of your list when looking at the economic calendar for the coming week. The press conference that follows the actual interest rate decision should create an extremely attractive environment for volatility traders.

The ECB is speculated to announce a full QE (quantitative easing) program whereby it will purchase a lot of sovereign debt. Personally we don’t think the ECB is going to announce the QE package this coming week as inflation stats were only released last Friday, and while it printed a new low of 0.3%, it was in line with expectations, therefore was not a surprise.


If the QE package is announced on Thursday, the tone of the press conference should be very interesting, as Mario Draghi, President of the ECB, will be questioned about when the package will be launched, and of course how it will be structured. That event would definitely be one to watch.

The rest of this first week of December will be packed with a number of other events relevant to the currency markets besides the ECB and this data from major economies will heavily influence trading.

The NFP (Non-Farm Payrolls) will be released in the United States, and this is very important piece of news because the Federal Reserve has a dual mandate: to keep inflation below or close to two percent, and to create jobs. Taking into account that some of last week’s data was a little on the lower side, we wouldn’t be surprised to see a disappointing outcome for the NFP on Friday.

It is worth mentioning though that last week US GDP (Gross Domestic Product) was on the strong side, showing a 3.9% growth rate, a rate that many countries only dream about.

Currency pairs move based on news and events coming from both economies that they represent, in the case of EURUSD, that would be Europe and the United States. Therefore, don’t be surprised to see the pair moving in one direction on Thursday with the ECB, only for Friday’s NFP announcements to bring a strong move in the other direction.

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Sammy is our forex expert, with over 20 years experience in the financial sector, she will be keeping you up to date with the ups and downs of currencies around the world

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