Markets are currently questioning the evolution of the euro and the dollar. The appreciation does not seem to correspond to the traditional explanations of the evolution of currencies by the differences in economic growth. U.S. monetary tightening is expected to begin with a gradual reduction in asset purchases by the Fed, which is currently proceeding at a rate of $120 billion per month.
The ECB, for its part, announced the reduction of its asset purchases. The €500 billion increase in asset purchases, bringing the pandemic-related purchase programme (PEPP) to €1,850 billion was announced by Christine Lagarde on 10 December. His statements suggested that the Eurosystem would do its utmost not to spend the envelope that should run until March 2022.
Unlike the Fed, the ECB is always slower to form or change its economic diagnosis and adapt its action. Where the Fed sees a risk in doing too little rather than too much in monetary and fiscal matters, the ECB seems primarily concerned with the opposite fear. The coming days will reveal the one that will falter between the Fed and the ECB.