Currencies: The ECB’s decision shocked not a penny – Virtual Poland

Currencies: The ECB's decision shocked not a penny – Virtual Poland

expected by the markets, the ECB’s decision to launch QE program, did not shake the Polish zloty, although the dollar strengthened against the euro. Approx. 16.45 per dollar you had to pay approx. 3.70 zł, the euro approx. 4.25 zł, followed by Swiss franc approx. 4.28 zł.

ECB will introduce since March of this year, the program of quantitative easing (QE) worth 1 trillion euros, which will rely on buying up bonds worth 60 billion euros a month; program will last until September 2016 years – said on Thursday the bank chief Mario Draghi. The ECB will also buy up bonds in trouble-ridden countries such as Greece, but – as pointed out by Draghi – they will have to meet additional criteria.

QE will be to increase the money supply on the market (this is electronic money – formerly called would Reprints) to EU governments could it increasingly borrow by issuing bonds. Borrowed money should be invested in projects that wi ll create jobs and stimulate the economy – eg. In the development of infrastructure.

With the creation of the ECB’s money to buy up bonds will be able to; this time will focus on government bonds, but it will also invest in securities of private institutions.

“In the course of today’s session we see a relatively neutral PLN reaction to the announcement by the ECB buying the assets. On the one hand, gold strengthened against the euro, which lost on most lists, on the other hand, we observe a slight decrease in the valuation of PLN to CHF due to declines in the pair EUR / CHF “- commented PAP analyst Konrad Ryczko DM BOS.

“As expected, the European Central Bank has decided to launch a program of quantitative easing. ECB from March 2015 to September 2016 years will be bought up assets worth 60 billion euros a month. Thus, the value of the program will reach the level of 1,140 billion euros , which is significantly higher than previous market expectations (500 – 700 billion), but will be more or less in line with yesterday’s rumors – 1.1 trillion euros. – Simon noted Zajkowski of mBank

He added that the assets of individual euro area countries bought will be in accordance with the share capital of the national central banks in the capital of the ECB and, in addition, banks will have to take on the 80 per cent. of risk.

“These reports resulted in the weakening of the euro and gains in European markets. EURUSD fell below 1.15, and the Frankfurt DAX index inside the new historical maximum at 10400 points. Euro also weakened against the zloty. EURPLN zniżkował to 4.2850, however, due to declines in eurodollar, zloty weakened against the US currency, and USDPLN rose above 3.73. – Added

As noted, the ECB’s decision resulted in the strengthening of the franc also against the zloty. EURCHF exchange rate rose to 4.35. “In the coming days, increased volatility in the prices of the franc should continue, but in the coming weeks, the gold should be some losses and stabilize the franc exchange rate between 4.0 and 4.20.” – Provides.

He added that in the long term, “the ECB’s actions should also support the zloty against the euro, as they have a chance to promote economic recovery in the euro area, which is in the main recipient of native export and what’s more, some of the increased liquidity in the European financial sector likely to find an outlet for the Polish debt market. ”