As expected, the European Central Bank decided to cut the key deposit rate by 25 basis points to 3.5%. Shortly after the publication, the euro gained in value against the US dollar. Investors will now focus on the press conference scheduled for 1:45 p.m. BST with President Lagarde, who will comment on the bankers' decision and hint at further plans for ongoing monetary policy in the eurozone.
Eurozone - ECB decision. Deposit rate: Actual: 3.5%. Expected: 3.5% Previously: 3.75%
ECB decision commentary:
- ECB will continue to follow a data-dependent and meeting-by-meeting approach to determining the appropriate level and duration.
- The ECB is not pre-committing to a particular rate path.
- Recent inflation data have come in broadly as expected, and latest ECB staff projections confirm previous inflation outlook
- ECB cuts growth forecasts for every year through 2026
- Inflation is expected to rise again in the latter part of this year.
- Staff project that the economy will grow by 0.8% in 2024, rising to 1.3% in 2025 and 1.5% in 2026.
- Staff see headline inflation averaging 2.5% in 2024, 2.2% in 2025 and 1.9% in 2026, as in June projections.
- Traders trim ECB rate bets, price 36bps more cuts by the year-end.
Euro gained in value against the US dollar shortly after ECB decision.
Source: xStation
Source: XTB
BREAKING: US PMIs beat estimates 📈 Stocks back in the green
💶European PMI Plunges as Iran Conflict Batters Economic Activity
Economic Calendar: PMI in Focus, a Key Day for Global Markets
➡️EURUSD Amid European Stagflation and Geopolitical Shock
The material on this page does not constitute as financial advice and does not take into account your level of understanding, investment objectives, financial situation or any other particular needs.
All the information provided, including opinions, market research, mathematical results and technical analyses published on the website or transmitted to you by other means is provided for information purposes only and should in no event be interpreted as an offer of, or solicitation for, a transaction in any financial instrument, nor should the information provided be construed as advice of legal or fiscal nature.
Any investment decisions you make shall be based exclusively on your level of understanding, investment objectives, financial situation or any other particular needs. Any decision to act on information published on the website or transmitted to you by other means is entirely at your own risk. You are solely responsible for such decisions.
If you are in doubt or are not sure that you understand a particular product, instrument, service, or transaction, you should seek professional or legal advice before trading.
Investing in OTC Derivatives carries a high degree of risk, as they are leveraged based products and often small movements in the market could lead to much larger movements in the value of your investment and this could work against you or for you. Please ensure that you fully understand the risks involved, taking into account your investments objectives and level of experience, before trading, and if necessary, seek independent advice.
