EURUSD skyrocketed after the US released its GDP statistics.
The major currency pair remains strong at the end of this trading week. The current quote for the instrument is 1.1650.
There were a lot of things to pay attention to yesterday. The European Central Bank had another session and left all key parameters of its monetary policy intact. In the comments, the ECB Governor Christine Lagarde said that rate-related market expectations were totally different from the regulator’s stance. She said that the analysis used by the ECB showed no conditions required for the rate revision by the time investors were expecting it. At the same time, the regulator believes that the reduction of the PEPP programme is not the reduction of the stimulus.
The ECB says that the pandemic influence is getting weaker, the economy is improving but not as fast as it was expected to. According to the regulator’s estimates, the GDP must exceed pre-pandemic levels by the end of the year.
The stance on inflation is quite standard. The CPI is expected to rise until the end of 2021 but may drop in 2022. Energy prices may have a negative influence on consumer activity.
Overall, the meeting was quite calm and the ECB didn’t give any clear signals whether it was ready to tighten its monetary policy or not, quite the contrary. The Euro remained stable but only until the moment the US released its GDP report.
The American economy added 2.0% q/q in the third quarter after expanding by 6.7% q/q the quarter before and against the expected reading of 2.7% q/q. The Real Consumer Spending report showed +1.6% after being +12.0% in the second quarter. The data was disappointing because it calls into question the regulator’s intentions during its November meeting, which is scheduled for 2-3 November. in response to the weak GDP report, the “greenback” plummeted.