Forex Today: ECB subtle batting higher yields
What you need to know on Friday, March 12:
The dollar fell as US Treasury yields surged. The yield on the 10-year note fell to 1.47%, recovering afterwards, although the greenback remained under pressure.
Wall Street surged, with the DJIA posting fresh all-time highs and the S&P flirting with record highs. The Nasdaq added over 2%.
The EUR/USD approaches 1.2000 after the ECB’s Monetary policy decision, while the GBP/USD pair trades around 1.3980 heading into the Asian opening. Commodity-linked currencies surged alongside equities, while USD/JPY remained within familiar levels.
Spot gold rose to $ 1,739.82 intraday but trimmed gains ahead of the close, ending the day around 1,723. Crude oil prices recovered some ground, with WTI finishing the day at $ 66.00 a barrel.
The European Central Bank had a monetary policy meeting, and as widely anticipated, it maintained rates unchanged, alongside the size of PEPP. Policymakers announced that bond purchases over the next quarter to be conducted at a significantly higher pace than during the first months of this year. German bund yields fell on the headline, but EUR/USD hold on to the higher ground. Within her press conference, President Christine Lagarde said that the ECB is watching the exchange rate, adding that the central bank is ready to recalibrate its tools.
US President Joe Biden signed the $1.9 trillion coronavirus relief bill into law.
Some EU countries suspended vaccinations with the AstraZeneca shot after some serious cases of blood cots were reported. Meanwhile, the distribution of covid vaccines in the area remains sluggish, and more delays are expected, all of which will undermine the region’s economic comeback. Although there is no proven connection between the inoculation of the vaccine and the adverse reactions, several countries have banned the use of at least one batch of the COVID-19 shot.
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