For currencies, Central banks set theme. As traders’ eye European Central Bank meeting, the euro is steady. Yuan rise to a two-week high.
On Thursday, the euro was broadly flat. It was ahead of the European Central Bank meeting and eurozone GDP data. Meanwhile, in early London trading, the dollar started to recover after a risk-on mood saw it fall overnight.
Moreover, due at 0900 GMT will be an advanced reading of eurozone GDP data for the first quarter. Nevertheless, social distancing and lockdown measures were introduced for only a small proportion of the period; the euro area GDP is forecasted to decline by 3.5 quarter-on-quarter. It is according to a Reuters poll.
Then attention will be on the European Central Bank. Thus, there are some forecasts that policymakers of the eurozone will expand purchases of debt. It is to include junk bonds and to take other steps for easing conditions in credit markets.
European Central Bank and other News
Analysts do not rule out a move later today. Nevertheless, they expect that the European Central Bank will make it more likely to act in June.
Antje Praefcke is Commerzbank FX and EM analyst. She said in a note to clients that there is no doubt that the ECB underlines that it will implement further measures if required.
Nevertheless, at the same time, it is probably pointing out that fiscal policy in the eurozone will make its contributions too.
Having touched a ten-day high, the common currency was broadly flat at $1.088.
European member states struggled to coordinate a debt-sharing recovery fund to combat the coronavirus. Thus, it has exposed old political divides of the European Union. Southern economies such as Spain and Italy are the hardest hit.
Adam Cole is an RBC analyst. He said in a note that clients forecast the focus on the European Central Bank conference.
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