Connect with us

Hi, what are you looking for?


EUR/USD Ends Rocky Ride Flat as ECB Taper Talk Seen Heating Up

Forex38 minutes ago (Jun 10, 2021 04:50PM ET)

(C) Reuters.

By Yasin Ebraim – The euro whipsawed against the dollar but ended the day flat Thursday as the European Central Bank signaled that policy would remain lower for longer, but signs of division among bank members on tapering sets up a rocky road to the September meeting.

EUR/USD fell 0.07% to $1.2171 after hitting a low of $1.2144.

The European Central Bank kept its benchmark rate steady at 0.00%, and said it expected over the “coming quarter” to continue purchases at a “significantly higher” pace than seen in the first months of 2021.

Heading into the decision, inflation was running high, prompting many to expect that the bank would have to go the extra mile to reassure investors that any notion of tapering would be dead on arrival.

The pickup in inflation was factored into the central bank’s latest projection as it upped its forecasts for economic growth and inflation for this year and 2022, but in a sign that it believes that pressure will transitory left its 2023 forecast unchanged.

The ECB also welcomed the recovery in the market, describing the risks to the economic outlook as “broadly balanced.”

This acknowledgement of an improving recovery didn’t shift the bank’s thinking on tapering. ECB Governor Christine Lagarde “insisted that there had been no discussion whatsoever in the meeting over the pace or nature of asset purchases further ahead than the coming quarter,” said Daiwa Capital Markets.

But behind the scenes at the central bank, not all its members appear to signing from the same page, setting up a tricky few months for the ECB governor.

“Lagarde admitted that there had been some diverging views on the Governing Council over today’s decision on the near-term pace of purchases, giving a taste of the potentially acrimonious debates ahead at September’s meeting,” Daiwa added.

Beyond the tricky taper talks, however, most see the euro gaining on the dollar amid a backdrop of improving eurozone economy as vaccinations gather pace, allowing a speedier reopening

“Beyond the June ECB meeting, we retain our constructive view on EUR/USD and target the 1.25 level this summer,” ING said earlier this week.

EUR/USD Ends Rocky Ride Flat as ECB Taper Talk Seen Heating Up

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

World News

Insomnia is the most common sleep disorder in the global population. Therefore, it is a problem that many people suffer or have suffered...

World News

George Soros and Bill Gates are part of a consortium acquiring a British developer of rapid-testing technology, including for Covid-19 and tropical diseases,...


If you parked your car in one of the thousands of parking spots across Calgary, there’s a good chance you paid the Calgary Parking...


ForexMay 27, 2021 02:04AM ET (C) Reuters. By Peter Nurse — The dollar edged higher in early European trade Thursday, finding support from...

Disclaimer: it's managers and its employees (collectively "The Company") do not make any guarantee or warranty about what is advertised or above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. Copyright © 2021 Your Morning Voice. All Rights Reserved