EUR/USD sinks below 1.16 as Fed’s hawkish cut and ECB hold weigh on Euro
EUR/USD retreats on Thursday as the European Central Bank (ECB) decided to hold rates unchanged, but traders, still digesting the 'hawkish' cut by the Federal Reserve (Fed) on Wednesday, kept the shared currency below the 1.1600 figure. The pair trades at 1.1565, down 0.30%.
ECB’s Lagarde says policy is “in a good place” as risks ease
The ECB kept its three interest rates unchanged, with the Deposit Facility, Main Refinancing and Marginal Lending Rates holding steady at 2.00%, 2.15%, and 2.40%, respectively. ECB’s President Christine Lagarde noted that monetary policy is in a “good place” as economic risks diminish and the economy in the Eurozone (EZ) shows signs of resilience.
Lagarde added that the Europe-US trade, the Middle East war de-escalation and the trade truce between China and the US had mitigated downside risks to growth.
The ECB is expected to publish its economic projections through 2028 at the December meeting, and if some policymakers expect inflation to undershoot the bank’s target, it will justify the debate for further easing at the next meeting.
In the US, the Federal Reserve cut rates by 25 basis points and hinted at a possible pause in its easing cycle, citing a division in the Federal Open Market Committee (FOMC). Also, Fed Chair Jerome Powell revealed the central bank collected state data related to unemployment claims, and noted that the jobs market has not deteriorated as expected.
Source : Fxstreet.com
