On Thursday, the bloc’s single currency witnessed a broad-based rally after the European Central Bank (ECB) had unveiled a larger-than-anticipated bond repurchase program worth of $1.35 trillion, which in effect could buy back the entire eurozone’s Government debts that the nations were forced to issue in order to offset impacts of the pandemic-led fiscal fallouts, however the global equity market had halted a seven-day long gaining streak amid a weaker US Dollar.
Besides, on the day’s market round off, the bloc’s common currency had extended its eight-day long rally after release of ECB stimulus, while the ECB (European Central Bank) had approved an extension of bond repurchase program by €600 billion to €1.35 billion.
Apart from that, a havoc-scale domestic support from Germany, which had unveiled a €130 billion bailout package a day earlier, had also added to a bullish wing to the eurozone’s common currency.
Euro spikes to three-month peak against the greenback as global stocks pause
Citing statistics, the bloc’s common currency had advanced nearly 4 per cent over the past eight sessions of consecutive gains, while on Thursday’s market round off the eurozone’s single currency rose as much as 0.83 per cent to $1.1335 against the greenback, while the US Dollar index (DXY) measured against a basket of six major currencies on an average fell by 0.53 per cent to 96.76 to breach its three-month lows.
In point of fact, the day’s broad-based rally of euro was almost entirely goaded by the long-anticipated stimulus released by the European Central Bank, while according to the sources, the ECB policymakers had debated over expanding their bond buy back program by between €500 billion to €750 billion before settling down on an expansion of €600 billion.
Apart from that, prospects of further ECB stimulus by September this year that could heighten up the ECB bond buyback program up to $1.85 trillion, had also added to investors’ optimism. Meanwhile, citing an out-and-out optimism over the ECB stimulus, a chief investment strategist at Inverness Counsel in New, Tim Ghriskey said late on the day, “There’s excessive optimism that everything is going to open up right way and it’s going to be fabulous. There’s some trepidation about that”.