EUR / USD stabilizes below 1.2200 after strong fluctuations

• EUR / USD remains on track to close little changed on Thursday.
• The ECB left its policy setup unchanged as expected.
• The US Dollar Index remains above 90.00.

After staying calm below 1.2100 for the first half of the day, the pair EUR/USD It fluctuated sharply as investors evaluated the European Central Bank (ECB) policy announcements. After falling sharply to a six-day low of 1.2144, the pair rebounded but lost momentum before regaining 1.2200. At time of writing, the EUR / USD was virtually unchanged on the day at 1.2175.

The ECB maintains the status quo

Following its June policy meeting, the ECB decided to leave the interest rates on the main refinancing operations, the credit facility and the deposit facility unchanged at 0.00%, 0.25% and -0.50%, respectively, as expected. . The ECB also indicated that it will maintain the total endowment of the Pandemic Emergency Purchase Program (PEPP) at 1.85 billion euros until at least the end of March 2022.

During the press conference, ECB President Christine Lagarde said it was too early to talk about an ‘exit from the PEPP’, adding that there was broad agreement on monetary policy decisions.

Citing sources familiar with the matter, Reuters reported that three ECB politicians wanted to slow down the PEPP to improve the economic outlook.

On the other hand, data released by the US Bureau of Labor Statistics revealed on Thursday that inflation, as measured by the Consumer Price Index (CPI), rose to 5% annually in May from 4.2% in April. . This reading beat the market expectation of 4.7% and helped the USD gain strength.

However, the dollar lost its strength with the major Wall Street indices opening sharply higher and the S&P 500 index reaching a new high. At the moment, the US dollar index records small daily losses at 90.07.

Technical levels