EUR/USD collapses, approaches 1.2900

FXStreet (Córdoba) - The euro remains under pressure across the board following ECB announcements. EUR/USD is in a free-fall mode, still looking for support and printed a fresh low at 1.2919, level last seen in July 2013.

The pair is having the worst day since 2012 and lost 200 pips since the ECB decision. After Wall Street opening the decline continued and it was trading at daily lows.

ECB sends EUR/USD sharply lower

The ECB cut the interest rate on the main refinancing operations to 0.05%, the deposit rate to -0.20% and announced it will start purchasing non-governmental securities and asset-backed securities (ABS) next month.

According to Richard Kelly, Head of European Rates and FX Research at TD Securities recent measures reinforces the downside bias to EUR/USD and that it will continue to grind lower over time.

“Some upside in data could present some volatility, but as long as we get traction on inflation expectations, real yield differentials to the US will support further weakening in the euro”, said Kelly.