According to Goldman Sachs, the active policy easing by the European Central Bank (ECB) could give a fresh impulse to the euro decline.
"Strengthening the expectations regarding the reduction of the interest rate the Fed provided some support for the EUR / USD pair , but attempts to grow because it may be unsustainable. We believe that the ECB will not be long in coming and will strike back, "said strategists at an investment bank.
They believe that the European regulator may lower the rate on deposits by 20 basis points, and in September even launch a new program of quantitative easing (QE).
According to experts, the ECB has room for maneuver in the framework of the asset purchase program.
"Within the framework of the existing restrictions, the financial institution can only purchase government bonds worth up to 400 billion euros. Also, the European Central Bank may increase purchases of corporate securities, but we are inclined to believe that the new QE program will be discreet and will limit purchases of assets in the amount of 30 billion euros for nine months, "said representatives of Goldman Sachs.
"We expect the ECB to demonstrate the "pigeon" bias already at the July meeting. At the end of which, the regulator will report that the potential of rates for further reduction. And for this purpose, he will remove the phrase "mid-2020" as an alleged period of maintaining rates at current low levels. In addition, the Financial Institute may consider introducing a multi-level system of rates depending on the size of excess reserves that banks hold in the ECB," they added.
