The EURUSD has continued its recovery to 1.0700.
After the European Central Bank’s (ECB) policy statements on Thursday, the EURUSD gained positive momentum and proceeded to rise towards 1.0700 early Friday. The increasing risk sentiment should help the pair hold its ground ahead of the weekend, and the technical picture shows that sellers are staying put for the time being.
The ECB has allayed worries of a European liquidity crisis.
The European Central Bank (ECB) raised its benchmark interest rates by 50 basis points (bps) on Thursday, as predicted. The bank noted the high uncertainty at the start of the policy statement, saying it underlines the ECB’s data-dependent approach to policy choices.
At the press conference, ECB President Christine Lagarde and Vice President Luis de Guindos both reassured investors that they have measures to deal with a possible liquidity problem and underlined that banks were working together to solve it. The Eurozone is robust.
While Lagarde refrained from signaling another large rate rise at the next meeting, the bullish market trend helped EUR/USD gain traction.
Nonetheless, numerous ECB members have expressed support for more rate rises in the near future. “I still feel that yesterday was not the final rate rise,” Governing Council member Gediminas imkus said, while policymaker Peter Kazimir emphasized the necessity to keep raising interest rates as core inflation remains stubborn.
After a 2% gain on Thursday, the Euro Stocks50 began with a positive gap on Friday, indicating that risk flows continue to dominate markets ahead of the weekend.
Later in the day, February Industrial Output statistics and the University of Michigan’s flash Consumer Sentiment Survey for March will be released. will be discussed on the economic docket in the United States. Considering this week’s extremely erratic trading, these data releases are unlikely to have a big influence on the value of the US dollar. Instead, market players will focus on risk perception. If Wall Street’s main indexes can build on Thursday’s robust gains, the EURUSD might maintain its positive trend into the week.
