The Euro jumped high against the world’s other major currencies as dated Thursday, December 03, right after the European Central Bank closely watched policy meeting fell short in the market’s expectations. New measures had been unveiled by the European Central Bank that made Euro recover against continuous fall last week.
As per data shown by investing.com, “EUR/USD jumped 1.98% to 1.0824 after falling to 1.0577 earlier, not far from Wednesday’s seven-and-a-half month trough of 1.0549. “ This projected data is a good indicator that the market’s economy was able to cope with the changes in figures days ago.
Many analysts are expecting that the European Central Bank (ECB) will lower the deposit facility rate to -0.4%. However, ECB’s governing council decided to lower the said deposit facility rate to -0.3% only from its previous rate of -0.20% cut.
To help boost the market’s economic figure resulting to a stronger Euro currency, the European Central Bank came up with a decision that they will held its marginal lending rate at 0.30%. Marginal lending rate refers to the rate which is charged to the banks if they borrow capital from the central bank itself. At the same time, ECB decided to maintain the main refinancing rate at a record-low of 0.05% which is in line with the market’s expectation.
Other solutions which the European Central Bank embraces is the expansion of its bond-buying purchase scheme beyond the current cut-off point of September 2016 until the end of March 2017 or beyond if necessary according to the ECB’s President Mario Draghi. It is also stated that the entity will extend its range of assets which are eligible for purchase and, at the same time, will buy both regional and local government debts. These so-called debts are then be reinvested to quantitative easing using its proceeds as the bond reach its maturity date.