Monex: Euro profiteert van ECB-boost
Hieronder volgt een commentaar in het Engels van Ranko Berich, Head of Research bij Monex Europe op de Amerikaanse dollar, euro en het Britse pond.
The euro ripped over 1.5% higher yesterday after the European Central Bank delivered an extra €600 bn in asset purchases as part of its Pandemic Emergency Purchase Programme (PEPP), going above market expectations of a €500 bn increase. This increases the total emergency bond-buying amount to €1.35 trn. The Bank additionally extended the horizon for net purchases under the PEPP until June 2021 and will continue to reinvest maturing proceeds at least until the end of 2022. The central bank also updated its GDP and inflation outlook for the eurozone and sees economic output contracting 8.7% in 2020 in the baseline scenario and expand by 5.2% in 2021. Meanwhile, inflation is expected to rise by 0.3% this year, 0.8% in 2021 and 1.3% in 2022. The boost to risk outlook following the ECB’s surprise combined with the continuing USD selling pressure had EURUSD flying to fresh highs throughout the late trading hours and extending its surge to this morning, while EURJPY reached a 13-month high. The buildup to the US Non-Farm Payroll data today complements the EURUSD rally, while this morning’s plunge of 25.8% in factory orders from Germany did little to take the pair off balance.
The dollar continued to lose traction yesterday as investors are leaving safe havens following optimism around the easing of lockdown restrictions that supports hope for an economic recovery. The dollar selling pressure was stretched to this morning as investors are awaiting the release of the Non-Farm Payrolls. Yesterday’s Initial Weekly Jobless Claims printed higher than anticipated at 1.87 million for the week ending May 29, leaving markets with concerns over today’s big labour data release. Today’s Non-Farm Payrolls set to show a fall of around 8 million jobs and will be critical to the dollar’s price action.
Sterling started out trading on the back foot against the dollar yesterday as concerns over a no-deal Brexit scenario took its toll on the currency, but turned the corner in the later trading hours and jumped to its highest level since mid-March amid renewed USD weakness. The latest rounds of talks between the UK and EU led to little progress as the nations are still far apart on crucial matters ahead of the end of June deadline. So far, Prime Minister Boris Johnson has repeatedly ruled out seeking additional time and warned the EU of walking away from the negotiations if no progress is made by the end of the month. The final round of negotiations is due to conclude formally today and with no signs of a narrowing gap between the UK and EU’s position, pressure builds up for Boris Johnson and European Commission President Ursula von der Leyen, who will hold talks regarding the negotiations later this month. Today’s data calendar included a contraction of 36 in UK consumer confidence, slightly below both the forecasted fall and prior reading of 34, but this did little to move the pound.