BREAKING: EBC cuts interest rates in line with expectations

Deposit rate was lowered to 2.75%, in line with expectations. Previously the deposit rate was at 3.00%.

Statement:

• ECB lowered three key interest rates by 25 bp
• EBC said that is not pre-commiting to a particular rate path
• EBC said that is determined to ensure that inflation stabilizes sustainably at 2% inflation goal
• EBC said that the economy is still facing headwinds but rising real incomes and gradually fading effects of restrictive monetary policy should support a pick-up in demand over time.
• EBC said that past rate hike are still transmitting and monetary policy is still restrictive
• EBC will follow a data-depentend, meeting by meeting approach in determining appriopriate policy stance

The ECB did not surprise with a statement that is generally largely unchanged. The ECB believes that rates are still restrictive and also sees the potential for a recovery. The market still sees the potential for further interest rate cuts after today's announcement. The EURUSD is minimally rebounding in anticipation of Christine Lagarde's speech in about 20 minutes.