EUR/USD Weakens After ECB Stimulus Fails to Reassure Markets

Posted Friday, March 13, 2020 by
Arslan Butt • 1 min read

The Euro is still trading weak against the US dollar a day after the ECB announced its stimulus measures to protect the Eurozone economy from possible weakness driven by the coronavirus outbreak. At the time of writing, EUR/USD is trading around 1.118.

On Thursday, the European Central Bank announced that it would increase lending to banks and ramp up its asset purchase program by an additional 120 billion euros. However, markets were disappointed by its decision to keep interest rates on hold at -0.50%, unlike several of its peers that have cut rates recently.

In comparison, the US looks set to take more measures towards protecting its economy in the wake of the coronavirus outbreak, which recently became a pandemic officially. On Thursday, the New York Fed announced additional liquidity in short-term lending by $1.5 trillion and also confirmed that it would add maturities to its Treasury purchases to offset any panic reaction in financial markets.

EUR/USD turned even more bearish as the market sentiment deteriorated and traders turned to the dollar as a preferred safe haven currency as a result of the heightened uncertainty in the markets.

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
Related Articles
0 0 votes
Article Rating
Notify of
Inline Feedbacks
View all comments