Speculation ECB to Act to Contain Debt Contagion

The euro rose almost a full percent to $1.3101 by 6:45 am in New York this morning as speculation grows that the European Central Bank (ECB) will provide an aggressive action plan to deal with spreading European debt. The Bank is scheduled to meet tomorrow and some analysts suggest the region’s central bank will announce wide-spread bond purchases to prop-up sovereign debt.

“Trichet reluctantly refused to rule out the possibility of expanding government-bond purchases,” said Simon Derrick, chief currency strategist at Bank of New York Mellon Corp. in London. “There’s a possibility the ECB could step up to the plate sometime soon. Do I think there could be a euro bounce today? Yes. Do I think it will be sustained? Probably not.”

Source: Bloomberg

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.