Tag Archives: strategy

Quantitative Easing Is On The Cards?

For those of you that do not know what quantitative easing is, its basically when a govt prints more money to help the economy of that country. The Fed had a meeting last week that put the possibility of more QE for the US a distinct possibility. QE has a major effect on currencies. If the US govt decide to go ahead with QE it will weaken the US dollar, which will in turn strengthen other currencies like the Euro, and the YEN. So taking Euro Dollar short positions, or Dollar YEN longs is a risky strategy while QE is on the cards.

As the announcement was out last week, most of the news is already factored into the price of the Dollar, but if QE goes ahead, you could see a big Dollar weakening move temporarily, so tread carefully and don’t over expose yourself in the coming weeks.