On Friday, the exchange rate of the Euro/Dollar currency pair consolidated at 1.1770 after an increase in the volatility of quotations the day before.
The results of the meeting of the European Central Bank provided increased dynamics, but did not lead to significant price changes. The ECB pledged to keep rates at record lows for a long time, while strong corporate financial statements supported the optimism of the economic recovery. Euro zone stock markets rose by 1.3% after the ECB's statement on maintaining rates until it becomes clear that the 2% inflation target is reached well before the end of the forecast horizon. The president of the European Central Bank, Christine Lagarde, warned that a new wave of the pandemic could pose a risk to the economic recovery in the region.
A survey of professional ECB forecasters showed that GDP growth and inflation will be higher in the next two years than according to previous estimates. In particular, the growth of consumer prices in 2021 will be 1.9% against the previously predicted 1.6%. The long-term inflation estimate for 2022 has been increased from 1.7% to 1.8%. The forecast of economic growth for 2021 has been raised to 4.7% from 4.2%. Despite the positive figures, the exchange rate of the single currency remains under pressure in the near future. The differences in the approaches to monetary policy of the Fed and the ECB are too noticeable. If the US regulator is already beginning to think about raising rates, the European Central Bank maintains its ultra-soft monetary policy even taking into account adjusted estimates.
The forecast expects a decline in the Euro/Dollar exchange rate to the levels of 1.1750, 1.1730 and 1.1700.