On Friday, the EUR/USD rose strongly from the previous day’s low near 1.1780.
On Thursday, the European Central Bank (ECB) adopted a new monetary policy plan, setting a target of 2% inflation.
The US dollar index stayed stable near 92.45, a 13-week high.
On Friday morning’s Asian session, the EUR/USD suffered slight losses. The pair took refuge near 1.1795, a multi-month low. The EUR/USD was trading at 1.838 at the time of writing, down 0.04 percent on the day.
Despite lower US economic statistics and a drop in US 10-year benchmark Treasury yields, the US Dollar Index (DXY), which gauges the greenback’s performance versus six major rivals, maintained firm below its 13-week high.
Investors remain bullish on the US dollar as fears of additional coronavirus infections grow, owing to the highly contagious Delta form and concerns about the economy’s recovery.
The euro, on the other hand, managed to keep its ground versus the dollar after the European Central Bank outlined a new monetary policy approach on Thursday. The ECB’s new strategy created space for inflation to rise above 2%.
The ECB established a 2 percent inflation target for the medium term in its first strategy review since 2003, compared to the prior below but near to a 2 percent inflation aim.
According to the ECB’s updated growth projections, the Eurozone will grow at 4.8 percent in 2021 and 4.5 percent in 2022, compared to May’s estimates of 4.3 percent and 4.4 percent, respectively.
The pair’s gains are limited due to a lack of risk appetite and the slight strength of the US dollar./n
