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The Euro continues growing. Overview for 28.05.2020

28 may 2020 - Fx4News

EURUSD intends to continue growing on Thursday; it is ready to update its two-month highs. 

EURUSD remains pretty optimistic. The current quote for the instrument is 1.1014.

Most likely, this optimism comes from the comments of the ECB Governor Christine Lagarde. When delivering her speech yesterday, the monetary policymaker updated the previous “soft” forecast for the Euro Area’s GDP and said that the indicator may lose as much as 8-12% in 2020. The key reason is, of course, the coronavirus pandemic. 

The numbers announced earlier implied the decline of 5-12%.

The Euro enthusiasts would surely have started selling the currency unless Lagarde had offered them hope. She said that the ECB would continue supporting the region’s economy. Investors interpreted her comment as follows: the regulator might announce more stimulus measures during its meeting that was scheduled for the next week. For example, expanded QE. In this light, the Euro continued growing. 

The US Beige Book published yesterday said that the coronavirus pandemic brought an extraordinary amount of uncertainty and considerable risk to the economy. Interest rates will be kept near zero until a recovery is firmly in place and the Federal Reserve is committed to using a full range of tools to support the US economy. 

Fed officials also noted that a second wave of the coronavirus outbreak with another round of strict restrictions could drag the US economy deeper into recession prompting a jump in unemployment and renewed downward pressure on inflation.

There are a lot of interesting numbers in today’s economic calendar, so EURUSD may get more volatile.

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