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.
EUR is fragile: ECB statement on April 30
The European Central Bank will unveil the refinancing rate and make the monetary policy statement on April 30 at 14:45 MT.
Instruments to trade: EUR/USD, EUR/GBP, EUR/AUD, EUR/CAD, EUR/CNH, EUR/CHF, EUR/NZD, EUR/JPY
Europe has been enormously damaged by the COVID-19. The IMF anticipates the GDP of the euro area to decline by 7.5% this year. There’s little the ECB can do to prevent the fall but it can mitigate the coronavirus impact.
The ECB has already taken some actions. Last month it effectively allowed Greek lenders to borrow from the central bank. Then, it has started accepting junk debts that shield sovereigns such as Italy from a downgrade. However, the ECB’s coronavirus program might expire by October if the central bank continues buying sovereign bonds at the same rate.
If there is no result, the bank would even have to try helicopter money. Just imagine, money that is falling out of a helicopter to the people below. However, it would not be the same in reality. According to Pictet Wealth Management, the ECB could offer money to banks at -1% under a condition that they grant 0% loans to their customers. Some analysts think that it could be a good option amid the present crisis.
Let’s see what the ECB will propose on April 30. Also the ECB press conference will be that day at 15:30 MT that often creates the heavy market volatility. Stay tune and remember:
If the ECB’s monetary policy statement is hawkish than expected, it will push EUR upward.
The USD continues dipping, while the GBP is rising on hopes for the Brexit deal done today.
US stocks and oil slipped as Donald Trump threatened not to sign a long-awaited stimulus bill into law. The market sentiment had been already fragile, and Trump’s comments worsened it even more.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.