alexa certify
0

Euro Bolsters as ECB Spawns Optimism

The euro has posted strong gains in early European forex trading on Friday. The European Central Bank’s decision to expand its stimulus measures is generating optimism for a global economic recovery.

EUR/USD traded at 1.1357, up by 0.2%, just off its strongest level in almost three months. It’s March 9 peak of $1.1495 is now in sight.

Over the week, the euro has risen 2.4% and is set to clinch a third straight week of gains.

These gains follow the ECB’s move on Thursday to increase its emergency bond purchase scheme by 600 billion euros. This is more than the 500 billion expected by markets, to 1.35 trillion euros, and extend the scheme to mid-2021.

These easing measures were another illustration that the ECB means business and stands ready to do whatever is necessary. It will help the euro’s economic area survive the corona crisis in any way it can. This is according to a research note from analysts at Nordea.

The event also adds to the string of positive surprises that have recently come out of Europe. This includes the EU’s recovery fund and another German stimulus package.

By contrast, the dollar index is down by 0.1% at 96.517, levels not seen in nearly three months. It’s on course for its third consecutive week of losses. 

Boosted Optimism Strengthens the Euro and other Currencies

The aussie broke through 70c earlier, for the first time this year. The kiwi is also now trading in the FX market at pre-pandemic levels.

This follows broad optimism that global economies will recover as social distancing restrictions are eased. This has resulted in investors deserting the safe haven.

The U.S. weekly jobless claims report showed that the number of Americans filing for benefits dropped below 2M last week. This was for the first time since mid-March, although the continuing claims figure actually rose.

Official U.S. employment data, due on Friday, will likely show nonfarm payrolls falling by 8 million in May. The unemployment rate is forecast to soar to 19.8%, from 14.7% in April.

Sterling has also posted gains on Friday, with GBP/USD being up by 0.5%, at 1.2652. Such levels have not been seen for almost three months.

This occurred despite the fact that the fourth round of EU-U.K. future relationship negotiations is set to conclude later Friday. There’s little evidence emerging of any major breakthroughs and this could weigh on the pound, going forward.

In forex news, against the yen, the common currency (euro) changed hands at 124.43, a 13-month high.

Regarding the Swiss franc, another safe-haven currency, it hit a five-month high of 1.08645.

Comments Rating 0 (0 reviews)

Get the latest economy news, trading news, and Forex news on Finance Brokerage. Check out our comprehensive trading education and list of best Forex brokers list here. Subscribe now and receive FREE updates on the market today!

You might also like

Leave a Reply

Sending

Subscribe to Our Newsletters

Have the best of Finance Brokerage News delivered directly to your mailbox. Subscribe now to receive the latest market news.