Pressure on EURUSD reduced by Thursday as the pair is slowly rising.
The major currency pair reversed in favor of recovery and started growing slowly. The current quote for the instrument is 1.1930.
Market players will focus their attention on the ECB meeting to be held today. the benchmark rate is highly likely to remain the same as before but investors are waiting for either hints or specific decisions on expansion and extension of stimulus programs. so far, the situation is as follows: the PEPP program, which is initially was planned to operate until March 2022, will probably be extended. Also, there is an option that the program volume may be increased, but it’s quite unlikely.
Chances are high that the regulator will talk about the latest increase in the bond yield, which was based on the forecasts for the economic recovery and inflation boost in the region. Market players believe that if the CPI skyrockets, the ECB will have to quickly revise its strategy and tighten its monetary policy earlier than the system requires.
Basically, the European regulator has to make a decision whether to interfere with its monetary policy or wait and watch as long as the situation allows. There is a sneaking feeling that the ECB will decide to act.
Probably, the ECB may publish revised economic outlooks for the key parameters. In December 2020, the regulator expected the GDP to add 3.9% and 4.2% in 2021 and 2022 respectively. However, in September the same year, the indicator was predicted to add 5.0% in 2021, but later these expectations were revised downwards. Let’s see what number will be in the March report, but it might be even worse.