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12:15 PM · 17 October 2024

BREAKING: EURUSD gains after ECB cuts rates 🏛️

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As expected, the European Central Bank decided to cut the key deposit rate by 25 basis points to 3.25%. 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: 3.25%. Expected: 3.25% Previously: 3.5% 

 

ECB decision commentary:

  • Domestic inflation remains high, as wages are still rising at an elevated pace.
  • Meanwhile, financing conditions remain restrictive.
  • Inflation outlook is also affected by recent downside surprises in indicators of economic activity.
  • We will keep policy rates sufficiently restrictive for as long as necessary.
  • The Eurosystem will no longer reinvest all of the principal payments from maturing securities purchased under PEPP, reducing PEPPa portfolio by €7.5 billion per month on average.
  • The inflation outlook is also affected by recent downside surprises in indicators of economic activity.
  • Traders hold ECB rate-cut bets steady, see 25 bps in December.

 

Euro gains against the US dollar shortly after ECB decision.

 

 
 

Source: xStation

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