EURUSD rose and then stopped. Overview for 12.03.2021
EURUSD survived after a volatile Thursday evening and requires some time to reach stability.
The major currency pair became extremely volatile last night after the ECB meeting. the current quote for the instrument is 1.1960.
Indeed, the European Central Bank was the key newsmaker yesterday evening. Its benchmark rate remained the same, just as expected, but the regulator made a decision relating to its PEPP program, which will be expanded in the second quarter of 2021.
According to the ECB, inflation in the region boosted in recent months and if this fact was disregarded, financing terms for all economic sectors might be tightened too soon. And that’s what the regulator can’t afford.
The regulator’s official estimates say that in 2021 the CPI may boost up to 2% but these changes shouldn’t influence its monetary policy.
The PEPP program is a non-standard monetary policy measure initiated in March 2020 to last for two years, but may be extended if necessary. As the ECB said, it was not planning to use the entire volume program for creating ultra-soft monetary conditions in Europe unless the economy requires it.
The 10-year bond yield went down a bit after the ECB’s decision and that’s quite good: it was rallying and even started making market players a bit nervous.
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