The Euro is higher, the Euro is tougher. Overview for 05.06.2020

The major currency pair is updating its March highs supported by the ECB stimulus measures. 

EURUSD is looking extremely strong on Friday and trying to keep the momentum. The current quote for the instrument is 1.1372.

Yesterday, the European Central Bank announced that it was going to support the region’s economy in every possible way. For example, the regulator expanded the PEPP volume by 600 billion per month up to 1.35 trillion. The program period is extended until and including July 2021. At the same time, the ECB is intending to keep a close eye on the economic environment.

Among other things, the ECB is going to monitor the region’s inflation – forecasts for the CPI were revised downwards and that’s a risk. The inflation target in the Euro Area remains at 2% and the regulator’s job is to stabilize the indicator close to this number. 

Average expectations imply that the Core CPI in 2020 may be 0.9%, which too little for the region. Under such circumstances, the PEPP may be expected to extend at least until the end of 2021. 

However, one shouldn’t expect the ECB to make any significant moves in the next couple of months – the regulator will require some time to monitor the market conditions and collect data about the efficiency of its stimulus programs. 

The ECB did everything it could and even more, and its efforts can be easily seen in the Euro behavior.