EUR / USD soars to new daily highs near 1.2120 after ECB

• EUR / USD maintains its buying tone after the ECB’s monetary policy decision.
• The ECB keeps interest rates unchanged and increases the size of the PEPP by € 500 billion.
• Investors await the latest economic projections and the post-meeting press conference.

The pair EUR/USD has soared to new daily highs, near the region of 1.2120, after the last monetary policy decision of the ECB.

As expected, the European Central Bank has decided to leave its benchmark interest rates unchanged (type of deposit facility, refinancing principal and marginal credit facility) at the December meeting. The ECB has increased the size of its Pandemic Emergency Purchasing Program (PEPP) in 500,000 million euros until March 2022 to support the EU economy affected by COVID-19.

In the accompanying monetary policy statement, the central bank reiterated that uncertainty remains high regarding the dynamics of the pandemic and the timing of the launch of the vaccine. Policy measures adopted today will help to preserve favorable financing conditions during the pandemic period, the statement added.

Since additional monetary stimulus had already been promised and it was discounted in the market price, the announcement has done little to provide a significant boost to the common currency. That said, the prevailing selling bias of the US dollar continues to support the buying tone around the EUR / USD pair.

Market participants are now awaiting the latest economic projections from the ECB. This will be followed by the post-meeting press conference, where comments from ECB President Christine Lagarde could instill new volatility and help investors seize some short-term opportunities.

EUR / USD technical levels