By TraderVox.com
Tradervox.com (Dublin) – Global central banks have added stimulus in their respective economies to spur growth. The European Central Bank have decided to start a bond buying program aimed at helping struggling countries to protect the borrowing cost. Further action has been seen from the Federal Reserve where it has resolved to embark on a third round of quantitative easing aimed at curbing the unemployment in the country. The strengthening yen has also forced the Bank of Japan to increase its asset purchases fund to 55 trillion yen. The additional stimulus by the central banks around the world is seen as coordinated action by global central banks to protect global economy from a recession.
The dollar index has dropped by 2.1 percent in the third quarter after decisions by the global central banks sent euro up against most of its traded counterparts. According to George Davis, the Chief Technical Analyst at Royal Bank of Canada in Toronto said that the European Central Bank decision to start a bond-buying process has shaped the market in the third quarter, terming it as an opening of a new chapter. The New Zealand dollar has increased the most against the US dollar among the major currencies, adding 3.3 percent in the last month. The euro has dropped by 0.7 percent against nine other major currencies while the Japanese currency has declined by 2.2 percent. The US dollar has declined by 4.3 percent.
The debt crisis in Euro Zone has forced the ECB to announce a bond buying program aimed at involving bonds with up to three years maturity period. This came as Spain and Italy benchmark yields reached above 6 percent. Spain has completed prepared an austerity budget aimed at cutting government spending. The market predicts that Spain will join other countries such as Greece, Portugal and Ireland in asking for international bailout.
The dollar has dropped by 1.5 percent in the last three months ending September to trade at 1.2866 against the euro.
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