When ECB decided to prolong its asset purchasing program by additional 9 months while cutting the volume of monthly purchases in half to €30 billion last week, the EUR/USD slumped 250 pips in just two days. Of course, the slump on Euro was not only the factor of the ECB decision but also a matter of much better than expected US GDP, that rose 3.0% with political uncertainty in Spain with Catalonia unilaterally declaring independence last Friday adding a pinch of salt.
Since the Bank of England is signalling that it will take back the post-Brexit rate cut this Thursday, the first rate hike in a decade in the UK should be perceived as a "dovish hike“, similar to dovish taper from the ECB last week.
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