On Thursday afternoon, the major currency pair’s attitude is rather positive; investors are keeping a wary eye on the ECB.
EURUSD intends to continue growing on Thursday. The current quote for the instrument is 1.0877.
During its meeting that was over yesterday, the US Federal Reserve System decided to leave the key interest rate unchanged at 0 – 0.25%. This decision was widely expected but market players were quite nervous in anticipation of the regulator’s comments on its future moves.
The Fed Chairman Jerome Powell told the media during the press conference that the economic activity was expected to fall rather quickly in the second quarter of 2020 but the QE program implemented by the regulator helped the economy a lot over the last couple of weeks. Powell paid particular attention to the decline of household spending, which is quite logical, and significant damage made to the retail sales sector.
According to the Fed, the April unemployment may be double-digit and the country must be ready for it.
In other words, the American regulator was telling market players that its monetary policy would be strong, active, and aggressive to support the lending market. However, investors were pretty clear in perceiving this message: more stimulus and greenback emission.
Not to say that the USD’s reaction to the regulator’s comments on keeping and expanding the QE was very negative, because they were expected. However, the thing that really made the American currency respond is the report on the country’s GDP in the first quarter, which showed -4.8% q/q against the expected reading of -4.0% q/q
The next important highlight ahead is the ECB meeting and investors are switching their attention to it.