The euro moved higher against the greenback on Wednesday as the Federal Reserve kept rates unchanged, but expressed a willingness to stick with its the ultra-loose monetary measures to support the economy.
“The committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals,” the Fed said Wednesday, as it kept its benchmark rate within a 0% to 0.25% range.
EUR/USD rose 0.54% to $1.0874.
The gains in the euro come just a day ahead of the European Central Bank meeting, though Bank of America (NYSE:BAC) said the meeting is unlikely to have a material impact on the single currency as the coronavirus impact continues to weigh.
“We would sell any EUR rally, as long as the COVID-19 crisis continues,” BofA said.
The ECB is not expected to expand the size and length of its pandemic emergency purchase program until later this year as policymakers await details from the EU on a potential proposed recovery fund for coronavirus.
“PEPP may be sufficiently large to fend off (temporarily) pressure on individual countries or product classes until we have more clarity on funding needs a bit later in the year,” BofA added.
The euro is down about 3% against the greenback for the year so far.