[19] At a basic level, there has been a clear correlation between changes in the relative balance sheet sizes of the ECB and the Federal Reserve and in the euro/US dollar exchange rate (Chart 6). The authors use announcements of quantitative easing (QE) type measures to predict future changes in the relative sizes of central bank balance sheets.
In turn, they estimate the effects of these exogenous balance sheet changes on exchange rates – and other relevant asset prices – over time. [20]  Chart 6 Relative balance sheet, the USD/EUR exchange-rate and QE announcements (percentages and USD/EUR)  Source: Dedola, Georgiadis, Gräb and Mehl (2018).