Euro currency movements are bullish ahead of the opening of the European session this Thursday (16/7). By noting this increase can bring the EURUSD pair to continue to surge and so far this week it has gone up to 1%. But it seems that the pair will not display significant movement again in the next few hours.
Probably because the ECB will hold a monetary policy meeting later in the evening. At the meeting later, it is predicted that the European central bank will not make changes to monetary policy. The main cause is because the effects of this step have begun to appear. But the rate of economic recovery is still full of uncertainty.
Moreover, the level of damage to the European economy seems to be very clear in Q2 2020. With all this, there are only a few reasons for the ECB to make changes in monetary policy. The bullish Euro will also be challenged by the results of the policy decision. If it does not change, post-policy comments will be highly considered by global investors.
Meanwhile, some analysts said the European Union meeting this week could have more impact on the Euro. All EU member states will continue talks on the economic recovery aid package. But if indeed the stimulus could get approval and be enforced, it could push the Euro bullish even higher.
The Movement of EURUSD Will Continue to be Guided by the Main Catalyst
Analysts from Reuters said the increase in the Euro currency in recent times due to the attitude of investors who hope that the recovery fund. Because member countries have almost reached a compromise with Germany and also proposals from France regarding the funding.
Today's EURUSD movement will continue to watch for the main driving catalysts. The ECB decision, however, will continue to be considered by investors. Besides that, the EU meeting seems to be a medium-term catalyst.
The dollar is in a defensive position, especially against other currencies affected by growth such as the Australian dollar, following rising US inflation and news of progress in developing vaccines.
The euro rose to as low as $ 1.1423, the highest level since March 10 and not far from its peak this year at $ 1.1495. Against the yen, the common currency hit a one-month high of 122.47 while it gained two-week highs against the British pound at 91.125 pence.
Bart Wakabayashi, manager of the State Street Bank and Trust Branch in Tokyo, said: "German, France, and Italy have taken steps of severe locking and the results of the corona virus right now. Economy can recover with stage."
Hope That Helped the Euro in this Session
The euro has been helped by hopes the European Union can approve at its summit this weekend on a rescue financing package that will limit economic damage to the bloc of the corona pandemic. The strength of the euro helped push the dollar index to 96.056, a one-month low.
The dollar extended losses on Tuesday after US consumer prices rebounded 0.6% month-on-month, the most in almost eight years, in June, easing concerns about deflationary pressures from the economic downturn.
To increase investor risk appetite, Moderna Inc. showed that the experimental vaccine for COVID-19 was safe and could trigger an immune response in 45 volunteers tested in the early stages of the study, US researchers reported on Tuesday.
Against that background, the risk-sensitive Australian dollar rose 0.2% to $ 0.6985. Sterling, however, underperformed after data showed the British economy recovered more slowly than expected.
Gross domestic product rose 1.8% in May after falling a record 20.8% in April, well below forecasts in a Reuters poll. The last pound traded at $ 1.2571. Meanwhile, the Yen was little moved at 107.27 yen per dollar, down from a two-week high of 106.635 ahead of the expected Bank of Japan policy announcement later in the day.
