EUR/GBP advances above 0.9000 after ECB expands PEPP by €600 billion
|- EUR/GBP rises sharply following ECB's policy announcements on Thursday.
- ECB keeps policy rates unchanged, expands PEPP by €600 billion.
The EUR/GBP pair rose sharply during the American trading hours as the shared currency gathered strength on the European Central Bank's (ECB) policy announcements. After advancing to a fresh daily high of 0.9007, the pair retreated slightly and was last seen up 0.75% on the day at 0.8995.
EUR capitalizes on ECB's decisive policy action
The ECB on Thursday announced that it kept its key interest rates unchanged as expected. More importantly, the bank said it expanded its Pandemic Emergency Purchase Programme (PEPP) by €600 billion to further support the economic recovery.
Assessing the details of the policy statement, "the bank extended the length of the PEPP to June 2021 – a year from now. The initial funds were projected to run out by the autumn," noted FXStreet analyst Yohay Elam. "And while the bank promised flexibility – potentially purchasing more bonds of hard-hit countries such as Spain and Italy – it refrained from junk bonds."
Additionally, Christine Lagarde, President of the ECB, said that they were confident about finding a solution with regards to German constitutional courts ruling on the ECB's asset purchase programme.
Reflecting the broad-based EUR strength, the EUR/USD pair rose above 1.1300 for the first time since mid-March. On Friday, Factory Orders data from Germany will be looked upon for fresh impetus.
Technical levels to watch for
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