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23 Jan 2015
ECB’s QE is good for CE3 - BBH
FXStreet (Barcelona) - The Brown Brothers Harriman Team comments that the ECB’s QE is expected be positive for European assets over the medium-term and might facilitate CE3 currencies to head lower with the falling euro.
Key Quotes
“The medium-term impact of QE on Eastern European assets seems positive, on balance. For dollar-based investors, CE3 currencies will be dragged down with the lower euro. But the ECB is doing some of the easing for those central banks and, assuming it works to some degree, they will benefit in terms of flows and potential growth spill overs.”
“The dramatic move by the SNB helped to highlight the still lingering concerns about FX-linked lending in the region.”
“That said, Hungary seems to have gone further in insulating the economy from this problem than Poland. In both cases, we expect the consequences of the move to be manageable.”
Key Quotes
“The medium-term impact of QE on Eastern European assets seems positive, on balance. For dollar-based investors, CE3 currencies will be dragged down with the lower euro. But the ECB is doing some of the easing for those central banks and, assuming it works to some degree, they will benefit in terms of flows and potential growth spill overs.”
“The dramatic move by the SNB helped to highlight the still lingering concerns about FX-linked lending in the region.”
“That said, Hungary seems to have gone further in insulating the economy from this problem than Poland. In both cases, we expect the consequences of the move to be manageable.”