Euro Slips as ECB Maintains Dovish Stance
Euro Slips as ECB Maintains Dovish Stance
The euro
slipped against the dollar Thursday as the European Central Bank
indicated it was in no rush to taper its emergency bond purchases
despite optimism over a strong recovery.To get more news about WikiFX, you can visit wikifx.com official website.
The
European Central Bank, as widely expected, left its benchmark rate at
0.00% and said it would stick with plans to accelerate emergency bond
purchases until March 2022 in a bid to keep bond yields steady.
“[T]he
Governing Council expects purchases under the PEPP over the current
quarter to continue to be conducted at a significantly higher pace than
during the first months of the year,” the ECB said in a monetary policy
statement.
President of the bank Christine Lagarde was also
quick to downplay any notion the central bank would look at tapering
bond purchases, saying it was “simply premature,” and adding that any
changes to the program would be “data-dependent.”
The dovish
stance from the ECB comes even as the central bank expressed optimism
over the recovery as the bloc gets its vaccine rollout back on track.
“Looking
ahead, progress with vaccination campaigns and the envisaged gradual
relaxation of containment measures underpin the expectation of a firm
rebound in economic activity in the course of 2021,” Lagarde said.
Following
the meeting, analysts talked up the prospect of further climb in the
euro on expectations that most of the bad news has been priced in.
“The
EUR/USD uptrend which started this month should remain in place,” ING
said. “Plenty of bad news has now been priced into the euro, the
currency has been trading with a persistent risk premium over the past
few months and despite the recent rise, EUR/USD still screens cheap
based on our short-term financial fair value model (by around 1.5%).”
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