[CHART 7: Decline in 10-year yields due to ECB communication] This chart shows how long-term sovereign yields in a number of countries have reacted to selected pieces of ECB communication in the six months leading up to start of QE.
This strategy is consistent with a flexible exchange rate regime that plays a key role as a shock absorber, allows market forces to determine the equilibrium real rate, and rests on the premise that the value of the currency is supported mainly by economic fundamentals. 2.