Loosening the Growth and Stability Pact is now being forced upon EU and ECB credibility has been put on the line. Both are likely to weigh on EUR/USD, according to economists at Westpac Institutional Bank.
Key quotes
“Markets now need to weigh whether the ECB’s emergency decision to boost APP to EUR750bn will bring some stability to yields given the change in the Stability and Growth Pact.”
“We suspect that EUR/USD may now have shifted into a lower 1.07-1.11 range.”
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