The ECB has now laid some very firm groundwork to announce after its meeting on 26th October that it will taper its asset purchases from January. Unlike most forecasters, we expect the Bank to set out a full roadmap to taper down to zero by next September, rather than announcing planned changes one step at a time. Financial markets might interpret this as somewhat hawkish. But any upward pressure on the euro should be limited by a pledge to increase the pace of purchases again if conditions so warrant and to keep interest rates at current rock bottom levels for a long time to come.
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