EUR/USD: Central banks to favor the euro

The Fed is set to cut rates while the ECB is hesitating. EUR/USD is mostly moving on news related to the respiratory disease and Yohay Elam, an analyst at FXStreet, depicts the reason for the rise in the pair.

Key quotes

“The short end of the curve is implying an imminent rate cut in March – a dramatic change that is weighing heavily on the dollar. The greenback has come under immense pressure across the board.” 

“Christine Lagarde seemed to rule out immediate monetary stimulus in a conversation with the Financial Times on Thursday. And while Vitas Vasiliauskas, a member of the ECB, said that the Governing Council could meet in an extraordinary matter, he admitted there is little room for action.”

“The old continent's largest economy is taking baby steps toward unleashing its spending potential. Investors are paying money to lend funds to the German government. If Germany spends – on battling coronavirus, infrastructure, or green projects – the ECB would be relieved of doing more.”