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On Thursday, Germany’s benchmark 10-year government bond yield erased more than 5% on Thursday and dropped below the European Central Bank’s deposit rate of -0.4% for the first time, confirming markets’ expectations of a dovish shift in the ECB’s policy outlook amid geopolitical uncertainties and dismal inflation outlook.

On the same note,  European Central Bank (ECB) Governing Council member Olli Rehn told Boersen Zeitung that further monetary stimulus was  needed until they saw an improvement in economic and inflation prospects.

Despite the choppy market action and the thin trading coınditions on July 4th, the EUR/USD pair inched lower on this development and erased its early gains. As of writing, the pair was unchanged on the day at 1.1275.

source: Reuters