EUR/USD on a Fed quantitative easing timeline

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It’s quite a bit more instructive that I expected. Euro strength has been typical after the announcements.

Obviously, one chart doesn’t tell the whole story because Europe had so many of its own issues but it’s worth pondering.

For more on QE, check the latest stories in the MNI feed on Fedwatchers.

Update: I was fractionally off on the QE2 arrow (and have now fixed it) but it makes a difference. EUR/USD peaked and then fell after the QE2 announcement. Of course, the announcement was extremely well telegraphed so it was a ‘sell the fact’ type trade. I would argue that there is a significantly higher level of uncertainty regarding QE3.

Author: Adam Button

Adam Button is the managing editor of ForexLiveâ„¢. He was previously the chief currency strategist at XForex and has also worked with Intermarket Strategy. Adam believes there's an edge in knowing every tidbit of news. He was formerly the head of the markets team at the Canadian Economic Press and is a graduate of Ryerson University. Adam lives in Montreal, follow him on Twitter: @FX_Button.


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  1. But now we have to compare on HOW Ben hinted? Were they similar?

    There is so much speculation. I mean who would have thought that dismal employment numbers would cause a risk rally?

    I’d say don’t read too much into it..and wait to confirm after the QE3 “revelation”.

  2. Looking just very quick at positive EURUSD moves after an announcement, they average about 13% that puts EURUSD at 1.5133. That would be a massive short squeeze. But would also begin to erode the ultra long term EURUSD slide.

  3. I’d be VERY careful making that assumption. This stuff does not happen in a vacuum and there are plenty of other factors at play. There are very likely to be diminishing returns the 5th time the Fed does something compared with earlier episodes…

  4. How far do you guys think USD/JPY might fall in the event of QE?

  5. @eurusdog – No way we’re seeing 1.5133 anytime soon………..

  6. Regarding this Quantitative Easing subject, Bryan Kemila’s “Illuminati Matrix latest addition give’s the most interesting view on it. Just my opinion.


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