EUR/USD Moves Higher Ahead of ECB Interest Rate Decision
- EUR/USD approaches 1.1900 as traders await the latest ECB decision.
- $1.9tn stimulus bill receives the go-ahead, to be signed by Biden on Friday.
- Initial jobless claims with the potential to stir the EUR/USD.
EUR/USD Moves Higher
The EUR/USD pair is climbing steadily to the upside for a third consecutive trading day on Thursday. The exchange rate briefly dipped to a low of 1.1835 on Tuesday and almost reached the 200-day moving average. However, the pair is now gravitating towards 1.20. Following this trend, the EUR/USD is now at 1.1970 as market participants expect to hear the latest news from the European Central Bank.
Later today, ECB President Christine Lagarde will update with the latest policy announcement. The expectation is that the central bank will leave policy unchanged amid rising yields that threaten to slow down the economic recovery. Consequently, the market seeks to find out if the ECB will ensure easy and low-cost financing conditions as a way to improve the economic outlook.
The European Central Bank updated projections will cast light on the pace of recovery. This comes following a slow allocation of EU recovery funds across European countries. In addition to an unbalanced approach towards vaccine distribution to member states.
As such, EUR/USD traders will look for hints of intervention by the ECB to tackle the rise in bond yields. As well as the bank’s intentions regarding the prospects of rising inflation in the eurozone.
Jobless Claims With the Potential to Stir the EUR/USD
On the other side of the Atlantic, the US has overcome all hurdles related to the largely-anticipated coronavirus recovery package. Therefore, the $1.9tn stimulus plan passed a final approval by the House of Representatives. The bill is now awaiting President Biden’s signature which will happen on Friday. Thus, the first $400 in unemployment benefits could reach Americans by end of March. According to President Biden, the White House expects the creation of as many as 7 million new jobs in the months to come. This will occur alongside the rollout of the budget.
Aside from the ECB rate decision, EUR/USD traders today will be monitoring the US initial jobless claims. Yet another factor that could influence the exchange rate and create heightened volatility.
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