The euro is expected to strengthen against the U.S. dollar in the coming months, regardless of whether the European Central Bank (ECB) announces further stimulus measures.
in the coming months, regardless of whether the European Central Bank announces further stimulus measures.
The pair traded at roughly $1.115 on Wednesday. The euro was nearing a two-month high against the greenback, while the U.S. dollar lost some ground as currency traders weighed the latest move from the U.S. Federal Reserve. The central bank announced a surprise rate cut of 50 basis points on Tuesday morning to help contain the economic impact of the coronavirus.
"That the ECB has far less room than the Fed to lower the short-term policy rate is obvious. U.S. short term rates therefore look to converge on those in Europe, which we think is enough to briefly push EUR/USD to 1.15 in the second quarter," Carsten Brzeski, chief economist at ING Germany said in a note Tuesday.next week, but its main interest rates are at a lower level compared to those in the U.S.
The Fed has tried to normalize policy at different times since the global financial crisis. Overall, the U.S. economy has managed to recover from the crisis at a much faster rate compared to the euro zone. As a result, the ECB has struggled to normalize, having stopped its massive bond-buying program in late 2018, only to then restart it less than a year later.
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Dow plummets despite Fed's emergency rate cut over coronavirusThe Federal Reserve announced a surprise rate cut of half a percentage point on Tuesday in an effort to mitigate the economic impacts of the coronavirus outbreak on the U.S. economy. Despite that emergency cut, the Dow Jones Industrial Average plummeted by 785 points by the time markets closed Tuesday
Read more »
European stocks climb in aftermath of emergency Fed rate cutEuropean stocks made gains early on Wednesday, on hopes governments and central banks will ease the impact of the coronavirus crisis after the Federal...
Read more »
Here are the key levels to watch in utilities and gold as investors get defensive: TraderDefensive, safe haven plays like gold and utilities are holding up after an emergency rate cut by the Federal Reserve, but traders are approaching them cautiously with uncertainty still looming.
Read more »
Dow sinks 2.9% after rate cut fails to stem market's dreadNEW YORK (AP) — Fear and uncertainty continue to control Wall Street, and stocks fell sharply Tuesday after an emergency interest-rate cut by the Federal Reserve failed to reassure markets wracked...
Read more »