The likelihood of additional monetary stimulus | 10 September 2020

10 September 2020, EUR/USD

The likelihood of additional monetary stimulus

EURUSD trading plan:

The European Central Bank is keeping its benchmark rate on hold at 0.00% and its deposit rate unchanged at 0.50%. A stronger currency generally weighs on export growth and curbs import prices, leading to a slowdown in inflation. ECB's Chief Economist Philip Lane said that the euro’s level "does matter" for monetary policy. In June, the ECB expected an inflation rate of 1.3% for 2022. Any downward revision will increase the likelihood of additional monetary stimulus. This is a negative signal for the European currency.

Trading recommendation: Sell 1.1845 and take profit 1.1800.

David Johnson
Analyst of «FreshForex» company
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