On Thursday, the European Central Bank left some Forex traders disappointed despite its expansion of the asset purchasing scheme. Some analysts had been expecting that President Christine Lagarde and the ECB's governing council would have considered deployment of the “bazooka” from their monetary policy toolbox. What was promised, instead, was that the central bank would keep its lending rate at the existing level of 0%, and deposit rates at -0.5%, largely as had been predicted by analysts. The ECB agreed to continue the ultra-low rate environment provided that banks would continue to lend funds to companies in order to help stimulate the economy. The ECB's quantitative easing scheme will be increased by some €500 billion, according to the bank's statement issued after the announcement.
In Tokyo trading as of 9:34 am, the EUR/USD was trading at $1.2156, a gain of 0.1153%; the pair has ranged from $1.21344 to $1.21603. The EUR/GBP was higher at 0.9133 pence, up 0.0964%, and off the session peak of 0.91385 pence.
Greenback Under Broad Pressure
The US dollar continues to come under pressure from numerous directions. The latest was news on Thursday that initial unemployment claims were unexpectedly higher than had been predicted. The US Department of Labor reported that 853,000 new claims were made in the week ending December 4th, against a predicted rise to 725,000 (from a revised 716,000). The rise in the number of US citizens infected and/or killed by the coronavirus is also weighing on the greenback. Finally, the lack of progress for discussions regarding a new stimulus package is eroding sentiment.