ECB President Lagarde has laid down a gloomy picture of the economy under the second covid wave sending EUR/USD to the lowest in a month at 1.1679. The EUR/USD pair is set to remain under pressure and focused on coronavirus statistics, FXStreet’s Analyst Yohay Elam reports.
ECB signals more stimulus in December
EUROPEAN CENTRAL BANK EMERGENCY MEASURES
At its monetary policy meeting held on October 29th, the Governing Council of the European Central Bank (ECB) decided to leave the interest rates on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility unchanged at 0.00%, 0.25% and -0.50%, respectively, as expected.
The European Central Bank (ECB) left its monetary policy unchanged as expected but mentioned it will “recalibrate” its instruments in December. According to analysts at Rabobank, the ECB is likely to extend and increase the Pandemic Emergency Purchase Programme (PEPP) in December. They warn that the success of this move will largely depend on Eurozone governments joining forces with the central bank.
ECB latest analysis
ECB LATEST NEWS
October MEETING REVIEW
ECB President Lagarde has laid down a gloomy picture of the economy under the second covid wave. She committed to providing additional stimulus measures in the December meeting. EUR/USD is set to remain under pressure and focused on coronavirus statistics.
SEPTEMBER MEETING REVIEW
"We do not target the FX rate" – Christine Lagarde, President of the European Central Bank. These words, alongside a headline saying the ECB prefers to remain calm on the exchange rate, sent EUR/USD toward 1.19. It is uncommon for a central bank to comment on FX – but investors were eyeing such remarks following previous murmurings about the value of the euro.
At its monetary policy meeting held on September10th, the Governing Council of the European Central Bank (ECB) decided to leave the interest rates on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility unchanged at 0.00%, 0.25% and -0.50%, respectively, as expected.
JULY MEETING REVIEW
Lagarde has picked the low-hanging fruit – and now needs her political skills to poke policymakers on the fiscal front – without scaring markets, a fine balancing act. The European Central Bank is set to leave its policy unchanged in its July meeting. The Frankfurt-based institution is set to take a break after topping up its Pandemic Emergency Purchase Program (PEPP) with €600 billion in June. This bond-buying scheme – which has fewer constraints than previous ones – now totals €1.35 trillion.
JUNE MEETING REVIEW
One-two punch – in favor of the euro. Less than 24 hours have passed since German Chancellor Angela Merkel announced a €130 billion stimulus plan, and in Frankfurt, on the other side of Europe's largest economy, another stimulus boost came. The European Central Bank has announced an increase of €600 billion to its Pandemic Emergency Purchase Program (PEPP), and it now reaches €1.35 trillion.
The European Central Bank brought its bond purchase program limit t €1.3 trillion in an effort to help member states cope with the expense of rebuilding their economies after the coronavirus pandemic. Citing the downward pressure on inflation and the bank stated, “The PEPP expansion will further ease the general monetary policy stance, supporting funding conditions in the real economy, especially for businesses and households.” Interest rate unchanged at 0.0%, deposit at -0.5%.