It is reported that a couple of weeks after the Fed finally tapered its QE3 to the end, there emerged rumors that the central banks of Japan and Europe were going to start similar programs, Market Leader reports. In reality the state of affairs is slightly different, MAsterforex-V Academy experts assume.
The rumors started when several editions named the existing economic problems in the Eurozone and Japan as well as the reasons why they emerged. they also named the reasons why any similar QE steps wont bring the desired effect within the scope of the mentioned developed economies. For example, Zerohedge states that the major reason is the differences between the economies. With that said, a European copy of QE is not going to be efficient by any means. The thing is that Japan is the sovereign issuer of the Japanese Yen, its national currency, and therefore can extend its money supply easily by printing more fiat money. While the Euro is the same fiat money, the implementation of QE is difficult since the ECB will have to get approval from each of the Eurozone members.
At the same time, the ECB previously tried QE in the recent past. Still, the attempt failed to bring the desired effect. This is confirmed by the fact that the European economy is still slowing down despite the fact that the ECB's interest rates are currently located at the all-time record low.
On top of that, Germany, which is Europe's biggest and strongest economy and the most influential player in the European economic arena, seems to be against any monetary stimuli like quantitative easing. The thing is that Germany is the biggest contributor to the Eurozone's budget and has to sponsor the lion's share of such financial stimuli more often than not. While the German authorities do not see any positive outcome of the previous stimuli, the do not see any point in starting a new one to waste the German taxpayers' money once again.
Today, the common European currency seems to be going down against the US Dollar once again, which is happening within the scope of the long-term downtrend seen over the last few weeks. At this point, the price has already reached the level of 1,2451, Masterforex-V Academy reports. The closest major levels of support are located at 1,2357 and 1,2255 while the closest major levels of resistance are the top of the descending MF sloping channel and pivot 1.2595.
