- EUR/USD pulls back from multi-day low after the ECB announced a heavy package to counter the coronavirus.
- ECB’s launches €750 billion pandemic emergency purchase programme (PEPP). Japan’s 30 trillion yen package is likely into the pipeline.
- Global measures to ward off the deadly virus keep the US dollar on the front foot, intermediate pullbacks triggered due to the news.
- Cases in Italy, the UK continue to rise, the $1.3 trillion US package is into the spotlight.
With the ECB’s €750 billion package to conquer the coronavirus pandemic is out and loud, EUR/USD recovers from the multi-day low to regain 1.1000 mark, currently 1.0950, by the press time of early Asian session on Thursday.
The European Central Bank’s (ECB) €750 billion pandemic emergency purchase programme (PEPP) will include all the asset categories eligible under the existing asset purchase programme. Further, the aid package will last until the end of 2020 and will be flexible in purchasing the public sector securities.
Read: Breaking: ECB announces €750 billion pandemic emergency purchase programme
Following the announcement, the ECB President Christine Lagarde showed readiness to use all necessary tools to tame the negative implications of the deadly virus.
While the news offers immediate strength to the Euro, also helping to recover the risk-tone, it fails to provide a major blow to the King Dollar which holds the throne amid the risk-off moves.
That said, the US equity futures are close to 1.0% in green after Wall Street continued on its south-run at the end of Wednesday’s closing.
It should also be noted that the latest numbers from Italy and the UK are worrisome while those from the US resonate the government/Fed action.
Traders will now keep eyes on the likely $1.3 trillion package from the US government. Treasury Secretary Steve Mnuchin is jostling with the Senators who are to vote on the coronavirus Relief Bill and make it law after the House already approved US President Donald Trump’s promise to counter the virus.
Technical Analysis
Unless recovering back beyond 200-day SMA, currently near 1.0950, bears are less likely to relinquish their control over the pair.
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