EURUSD continues analysing the ECB meeting results and the demand for “safe haven” assets.
The major currency pair is falling at the end of another trading week. The current quote for the instrument is 1.1777.
During its July meeting that was over yesterday, the European Central Bank left the benchmark interest rate unchanged at zero and confirmed its intentions to pursue the ultra-soft monetary policy for a long period of time. the ECB Governor Christine Lagarde said that a new coronavirus wave might threaten the economic recovery procedure in Europe despite the regulator’s balanced approach to building economic outlooks.
Many global Central Banks are considering a possibility to scale down their stimulus programs but the ECB is not one of them. In the long-term, this factor may pressure the European currency pretty much.
In the comments after the meeting, the regulator said that the Euro Area economy recovered in the second quarter of 2021 and was feeling quite well after social restrictions were removed. The ECB’s expectations about industrial production are positive despite some issues with the delivery of parts and components. The delta strain of the COVIDS-19 may slow down the services industry recovery, it’s still a huge risk.
According to the ECB, the economic activity will return to its pre-crisis levels in the first quarter of 2022. However, it will require a lot of time and effort to eliminate the effects of the pandemic.
In June, inflation was 1.9% and the ECB is expecting it to continue growing in the coming months. The indicator may drop in 2022, after local factors, such as an upsurge in energy prices, disappear.