The euro lower against the dollar since 2003 – The World

Le Monde | 06/03/2015 at 9:12 • Updated 03/06/2015 09:45 | By Audrey Cooper

It has not yet begun, but its effects are already being felt. And first on the “value” of the euro. The massive plan public debt repurchase (“quantitative easing” or “QE”) really begins Monday, March 9, announced on Thursday, March 5, Mario Draghi, the president of the European Central Bank (ECB). But, even before that fateful date, the euro plunged to below $ 1.10 on Thursday night

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Ever since September 2003 the European single currency had reached such a level. Friday morning, the euro resumed, however slightly, passing just above this symbolic threshold.

This is the meeting of the Governing Council of the ECB, delocalized (like twice a year ) in Frankfurt in Cyprus, was eagerly awaited. “Super Mario” will set out the terms of QE, the ultimate “bazooka” to revive growth in the euro zone. The goal? Counter the deflationary pressures on the Old Continent, reviving credit and activity. By buying sovereign debt, the ECB will lessen yields (which move the opposite of demand), pushing investors into riskier assets such as stocks or corporate debt.

But by increasing the amount of euros in circulation, the institute also hopes to clearly reduce the single currency against the dollar, favoring the passage European exporters.

Already in early September 2014 when the ECB announced a decrease in its rate and the launch of a buyback program ABS ( asset-backed securities ), these asset-backed securities in particular SMEs, as well as obligations secure financial institutions in the euro area, the institution did not hide his intentions: he was admittedly wavering support the growth in the euro area and curb the risk of deflation, but also to bring down the euro.

Shortly after this meeting, Ewald Nowotny, Governor of the Bank of Austria, had also confirmed that the target was “to influence the exchange rate”. A major taboo then fell because rarely a member of the institution had shown himself also clear on this point. This bet of the decline of the euro is already successful, he seems.