Euro Weakens Could Accomplish If the ECB Policy

Of the European Union Dilaorkan, bond purchase policy states troubled by the European Central Bank (ECB) has drawn criticism from German monetary authorities. Outright Monetary Transactions program (OMT), which was launched last September was considered tarnished the central bank's independence. 

As reported by the German media, Handelsblatt, Germany's central bank does not agree with the policy formula in OMT. In the thick 29 page report prepared for the Constitutional Court, the Bundesbank warned of a decline in ECB image in the eyes of the world because it is too busy with private areas of a country.The ECB will hold a meeting this week. The initial reaction to the ECB forex market depends on the nature of the policy mix that the central bank will spend this week.

 
In this case, Credit Suisse discussed the following scenario as an outline of the possible implications it will have on EUR / USD, EUR / JPY and other major currency pairs.Is a combination of the basic expectations of interest rate cuts and a form of credit easing measures.This combination will have a mixed impact on the euro. While cutting interest rates is likely to undermine support for the EUR, the announcement of the measures targeted at SMEs is likely to depress yields on euro zone periphery areas and will provide support for the euro. 
If the ECB is only releasing cutting interest rates by 25 basis points without a non-standard measures are targeted at SME or commitment to the credit easing measures to come, Credit Suisse estimates that the euro will lose against the USD since the Euro losing support.Alternatively, according to Credit Suisse, the ECB is likely to weaken the euro by cutting interest rates more than expected. This, according to Credit Suisse, are also likely to hit the euro versus the local currency satellites, including GBP.