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The article presents research on how quantitative easing affects the USD/EUR exchange rate. It finds large, persistent effects operating through exchange rate risk and short-term interest rate differentials.
Expectations about future monetary policy also shape the response.
Currency responses to central bank asset purchases influence dollar-priced commodity values and trade competitiveness. This is background analysis without a new market shock.
ecb.europa.euDedola, Luca, Georgiadis, Georgios, Gräb, Johannes, Mehl, ArnaudOct 20, 2020After 1,108 past macro events, EURUSD moved a median -0.1% over 5 sessions (46% higher; middle half -0.7% to +0.6%), and -0.3% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
