Speculations of some aggressive ECB easing seemed to weigh on the shared currency as Thursday’s key focus will be on the highly anticipated ECB monetary policy decision, Haresh Menghani, an analyst at FXStreet, informs.
“The shared currency was weighed down by concerns that the Eurozone could face a recession in the near-term amid Italy’s lockdown to prevent the virus outbreak and fueled expectations.”
“Market worries intensified further after the World Health Organization declared the novel coronavirus a global pandemic. Adding to this, Trump suspended all travel from Europe for 30 days in order to fight the coronavirus.”
“Given that rates are already at a record low level of -0.5%, the market remains divided over prospects of any further cuts as it could hurt bank margins and possibly squeeze lending.”
“Thursday’s announcement, which will be followed by the post-meeting press conference, has the potential to infuse a fresh bout of volatility across the euro pairs.”