Early on Friday, the euro continues to trade strong against the US dollar, supported by the ECB’s decision to expand its PEPP stimulus program by an additional 600 billion euros, in order to prop up the worst affected economies in the Eurozone. At the time of writing, EUR/USD is trading around 1.134.
At its latest policy meeting on Thursday, the ECB announced the expansion of its emergency bond purchase program to 1.35 trillion euros even as it extended the program to last until mid of next year. This news sent EUR/USD to a near three-month high of 1.1326 during the previous session, and it has climbed higher since then.
So far this week, EUR/USD has gained around 2.1% and is all set to post gains for the third consecutive week. The bullishness in the direct currency pair was driven by an improvement in the overall market sentiment over the past few weeks after countries around the world signaled their interest in easing lockdown restrictions and resuming economic activity after several weeks.
This sentiment has not only helped diminish the safe haven appeal of the US dollar, but sent traders towards riskier currencies, including the euro. On the other hand, the US dollar index DXY is all set to post a loss for the third straight week.