Euro drops on ECB bond purchase expectations

Euro continues to lose ground against the dollar and the pound as expectations of a bond purchase program become stronger. Many expect more quantitative easing from the European Central Bank, and that is weighing on the 19-nation currency.

The eurozone economy remains on the brink of recession, and policymakers are trying to do whatever they can to combat deflation. As a result, the euro keeps heading lower. The next move from the ECB is likely to be a bond purchase program designed to kickstart the economy.

Many expect ECB President Mario Draghi to announce a 550 billion euro bond purchase program that will inject more liquidity into the eurozone economy. The expectations of quantitative easing are sending the euro lower against the US dollar and the UK pound, two of the euro’s biggest trading partners.

Expectations for quantitative easing, and the precipitous drops for the 19-nation currency, have already changed the way some countries manage their own currencies. Recently, the Swiss franc’s peg to the euro was ended, and some think that RMB will be the next peg to be got rid of as a result of the euro’s difficulties.

At 11:31 GMT EUR? USD is down to 1.1587 from the open at 1.1609. EUR/GBP is down to 0.7646 from the open at 0.7680. EUR/JPY is up to 137.2980 from the open at 136.4970.

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