UBS analysts note that the euro has plenty of room to appreciate saying that versus the current EUR/USD value of 1.11 “most valuation models, including PPP and current account-based FEER, indicate that EUR/USD fair value is between 1.25 and 1.35.”
The ECB’s bond buying scheme and record-low interest rates remain the culprits holding the euro down, but Bundesbank president and ECB policy maker Jens Weidmann says it’s high time the ECB starts discussing an end to the stimulus, reports Pound Sterling Live Monday.
“As far as a possible extension of the bonds-buying program goes, this hasn’t yet been discussed in the ECB Council,” Weidmann told German newspaper Welt am Sonntag in an interview.
“But in my view, if the solid economic development and price development continues, as expected, it would be time to take a look at an exit from the very easy monetary policies,” he said.