Strong USD on Tuesday
The main market tendency today is that the US dollar is rising against its major peers and riskier assets such as stocks and oil are plummeting.
ECB report is in focus
Instruments to trade: EUR/USD, EUR/JPY, EUR/GBP
The European Central Bank expanded its Pandemic Emergency Purchase Programme (PEPP) by an additional €500 billion and extended it to 2022 during its meeting in December and left the rate at a record low of 0.0%. The purpose of those actions was to support the EU's struggling economy amid the Covid-19 crisis. Indeed, the resurgence of new cases in Europe has pressed the Eurozone into a double-dip recession. Economic indicators showed that the EU economic activity slightly improved at the start of 2021, but these levels are well below pre-pandemic ones. Besides, Brexit is having an impact too. Since the ECB extended its bond-buying program until 2022, we shouldn’t expect any major changes this year, but who knows!
- If the ECB confirms more easing needed, the EUR will fall.
- If the ECB doesn’t change its attitude, the EUR will rise.
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USD came under selling pressure
The US dollar’s weakness offered a boost to emerging-market currencies and oil.
Upside hopes for the GBP?
The British monthly GDP is announced on Friday at 09:00 MT time.
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