The European Central Bank (ECB) is widely expected to announce an increase in its stimulus measures when it meets on Thursday in Frankfurt. Joseph Trevisani, an analyst at FXStreet, expects a prosperous euro after the meeting.
“An expansion of the €750 billion Pandemic Emergency Purchase Program (PEPP), the bank’s bond buying effort launched in March, will likely be accompanied by the long-standing warning that the main burden of European recovery must be borne by the national governments.”
“The ECB will update its economic estimates on Thursday and Ms Lagarde has said she expects the eurozone to contract between 8% and 12% this year.”
“In March the ECB projected a 1.6% inflation rate by 2022, that forecast will most likely be reduced in Thursday’s economic estimates. Neither central bank has been successful in the post-financial crisis decade in bringing inflation to their target.”
“The additional PEPP limits and the cheerleading Ms Lagarde will give to the new EU program should keep the euro buoyant.”
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