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Central banks on track to end easy money supply

The announcement of a deal on trade ensures the European Central Bank will remain on track to end quantitative easing.

The Euro was rallying on Wednesday on expectations that the ECB may take a further step to raise interest rates sooner.

The ECB President Mario Draghi has committed to ending the ECB’s €2.6 trillion bond programme by December 2018. That commitment did not change on Thursday, leading to a drop in the Euro’s exchange rate against all major currencies.

In the months leading to the end of the bond-buying programme, the ECB may opt for exposure to long-term sovereign debt, improving the debt profile of member states.

More boldly, the UK is expected to raise interest rates, despite decelerating growth, as inflation has risen over the 2% policy target.

The ECB has made clear there will not be an interest rate rise before the summer of 2019.

Next week, the governors of the Bank of Japan, the US Federal Reserve, the Bank of England and the ECB are expected to meet to coordinate policy.

The only open question for the ECB remains whether Greece will benefit from the bond-buying programme over the next few months.