Article by ForexTime
The removal of a big legal hurdle to government bond buying by the European Central Bank pushed the euro to a fresh nine-year low on Wednesday and paved the way for policy makers to press ahead with quantitative easing next week.
A top adviser to the European Court of Justice bolstered the case for aggressive action by the ECB next Thursday, after he said an earlier — more controversial —sovereign debt-buying plan lay within the ECB’s mandate.
The ECJ decision on Wednesday implies that the ECB’s “whatever it takes” mantra (said last year) to save the Eurozone from economic ruin by buying government bonds was compatible with EU law. The final decision on the Outright Monetary Transactions (OMT) programme, expected in four to six months, is likely to follow the advocate-general’s opinion.
The euro fell to $1.1731 against the dollar in early trading as investors increased bets the ECB would soon buy government bonds in bulk, but later recouped its losses after disappointing signs on US consumer spending sent the dollar down.
Article by ForexTime
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