ECB Preview: New initiatives unlikely to support the euro
The ECB is expected to increase its bond buying program but the new bank programs are unlikely to provide support to the euro, in the opinion of FXStreet’s analyst Joseph Trevisani.
Key quotes
“The ECB is expected to ramp up its bond purchase program to assist governments in defraying the cost of fighting the Coronavirus public health crisis.”
“The ECB may also begin other support measures including perhaps lower borrowing costs for commercial banks, or, following the Fed’s direction, loans to businesses and individuals or even junk bond purchases. Though possible, the last two are unlikely.”
“The ECB’s new initiatives will be far less than necessary to impress the markets in the face of the massive US fiscal and monetary responses.”
“As the global pandemic wanes and American and continental markets reopen the dollar should replace its safety play with the traditional backing of a faster growing and more expansive US economy.”
Author
FXStreet Team
FXStreet
