The ECB is playing it cautious now

One Bearish Factor For the Euro From the ECB

Posted Tuesday, July 28, 2020 by
Skerdian Meta • 1 min read

The Euro has been bullish since the middle of May, especially against the USD, which came mainly from the USD side, since the Buck has been tumbling lower. But, EUR/GBP has also been bullish, as has EUR/JPY or EUR/USD . The coronavirus stimulus package from the EU. But, the European Central Bank (ECB) is ordering banks to hold off dividends until the end of this year, which is mildly negative for the Euro.

  • ECB asks European banks to hold off on dividends and not to buy back shares until January 2021
  • Calls for banks not to commit to pay dividends for the rest of the year
  • Expects banks to exercise moderation to conserve capital
  • ECB will review whether or not this stance remains necessary in Q4
  • Will take into account economic environment, financial system and capital planning
That won’t be welcome news for banking stocks as we look towards the session ahead. But hoping to have this recommendation lifted by October was always a long shot anyway.
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