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The ECB is more likely than not to loosen monetary policy via further unconventional measures amid the likelihood of deep recessions. That would, in theory, weigh on the euro, according to economists at the National Bank of Canada.

Key quotes

“Already battered by prospects of a deep eurozone recession, the euro has room to fall further. The ECB will pull all the stops to cushion the blow by delving deeper in unconventional policies.” 

“Political backlash from the European Union’s apparent mishandling of the coronavirus crisis in places like Italy, which is fomenting talk of a potential break-up of the union, won’t help the common currency either.”

 “We continue to expect EUR/USD to drop to 1.03 this year.”