Front-running changes in monetary policy is a popular trading strategy amongst foreign exchange traders. This year, euro traders successfully bid up the value of the euro ahead of the ECB’s tapering announcement in October. Looking at EUR/USD, the pair made its highs in early September and sold off following the event. Prior to the ECB’s rate decision and statement this week, many were betting th…

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Looking at the latest data on Bloomberg, the consensus expectation for tomorrow’s ECB announcement is that the Bank will extend its asset buying program by a further 9 months, while reducing the pace of its purchases by 30b per month. The current program allows the Bank to acquire 60b of government and corporate bonds a month, and terminates at the end of 2017. This is the big moment that euro sp…

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In spite of the recent downturn in the euro’s fortunes and the referendum-related drama unfolding in Catalonia, euro bulls remain committed. Looking at recent futures data, long euro positions are at multi-year highs and have been elevated since last July. Despite no clear indications that the ECB is set to taper its quantitative easing program, expectations remain high. With the threat of an EU …

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Tags: Euro