Greetham says the move, announced today, would ease tighteness of dollar funding for European banks and could see the European Central Bank issue fixed-rate tenders of euros to “ease interbank pressures”.
He says: “The dollar move is a repeat of the joint action central banks took in December 2007, early on in the last crisis.
“Liquidity support will not remove solvency fears as these relate to Greek default and its possible knock-on effects.”
He adds: “It’s also worth remembering it is the slowdown in global growth over 2011 that is putting increasing pressure on the European periphery and lead indicators suggest that slowdown is still in place.”
The Fidelity manager says policy makers were likely to issue positive announcements to “shock the market into a more positive frame of mind”.
Yet, he says Europe will need to resolve debt problems, particularly by managing a Greek default.
He says there will also need to be strong politiccal backing for the monetary union and stronger global growth.