EUR/USD: Limited recovery

The Federal Reserve has decimated interest rates and announced $700 billion of new bond-buying. Nevertheless, EUR/USD's recovery has been limited, within well-known ranges, as FXStreet’s Yohay Elam notes.

Key quotes

“Apart from the rate cut and the new bond-buying scheme, the Fed also announced dollar swaps with five other central banks, to ease the pressure off the dollar.” 

“The move, just before markets open and three days before its regular meeting has only provided cushioning, but no relief. The demand for the dollar is set to continue.”

“Over the weekend, Spain announced a state of emergency, France imposed severe restrictions, Italy confirmed a total death toll of over 1,800 while Germany is closing borders with neighboring countries. The news from Europe weighs on the euro.”

“Later in the day, EU finance ministers will hold a special teleconference to discuss the situation, including borders closures but also the fiscal response. That is the euro's chance to surge – or collapse if it results in another ‘euro-fudge’.” 

“Leaders of the Group of Seven (G7) nations led by the US is also eyed, but President Donald Trump was reportedly reluctant to hold it while Merkel is pessimistic about this online conference.”