ECB Anticipatory Easing Stimulus as China Scraps Foreign Quotas

Published on: 09/13/19 9:04 AM

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Category: Newsletter

The second week of September 2019 witnessed a rise in risk appetite as the FX Market anticipated ECB fiscal easing stimulus for Eurozone economies that continued to underperform with no tangible reprieve. On the other hand, China raised its financial stakes by scrapping quotas on foreign investments.  Forex Broker comparison service FXBrokerFeed brings you the current updates and trends in the FX Broker Market, featuring the ECB September meeting outlook, and China’s tactical scrapping of foreign investor quotas.

Eyes on European Central Bank

The Eurozone is reeling under recessionary pressure with disappointing German, Italian, Spanish and French multi-sector data persisting. The Citi Economic Surprise Index indicated a -36.9 drop first week of September and EUR/USD struggling at 1.1050 ahead of ECB meeting on Thursday. Markets highly anticipated a dovish ECB stance deemed critical to avert further downward slides and bring the Euro back on a better yielding curve against safe haven currencies. Additionally, pundits touted a 20 bps rate cut as favorable in the short term to help business take advantage of toned down tariffs grandstanding, new Brexit deal prospects, reciprocal global growth uptrends, in addition to spurring risk appetite.

China’s quota-less FX Market

The Chinese State Administration of Foreign Exchange on Tuesday scrapped a $300 billion cap on foreign purchase, and ownership of (QFII and RQFII) Chinese stocks and bonds. The move is seen as a tactical gesture to attract much needed foreign capital inflows to counter losses from the dragging tariffs war stalemate. This further compliments earlier grants that had removed lock-in periods for foreign earnings. Foreign investors will henceforth be able to repatriate their earnings regularly and be able to wield majority control in local securities joint ventures. The Asian markets responded favorably to the news while the FTSE China A50 futures index rose on sentiment by 0.6% in the Singapore Exchange. Today’s traders need a dependable way to navigate through the ever-changing world of Forex trading. FXBrokerFeed brings to you relevant information about FX Brokers and currency pairs 24/7, and is an essential tool that will help improve your trading performance. Start your 30-day free trial today!