The European Central Bank (EBC) announced on Thursday that it reduced key rates by 25 base points (BPS) after the April political meeting, as expected. Thanks to this decision, the interest rate in the main refinancing operations, interest rates in the extreme credit center and deposit plant amounted to 2.4%, 2.65%and 2.25%, respectively.
Follow our live relations on advertisements regarding the ECB policy and market reaction.
Key results from the ECB’s political declaration
“ANDNflationa is still developing as expected staff, and in March both the headline and the core of inflation are decreasing. “
“The euro area economy builds some resistance to global shocks, but growth prospects have deteriorated due to the growing commercial tensions.”
“Increased uncertainty will probably reduce trust among households and companies, and an unfavorable and unstable market reaction to trade voltages will probably affect financing conditions.”
“These factors may additionally consider economic perspectives for the euro area.”
“Especially in the current conditions of exceptional uncertainty, it will be in line with the approach depending on data and meeting to determine the appropriate monetary policy position.”
“Decisions regarding interest rates will be based on the assessment of inflation perspectives in the light of incoming economic and financial data, inflation dynamics and monetary policy transfer power.”
“EBC is not initially related to the specific path of the rate.”
“Pandemic Emergency Purchase Program (PEPP) and application portfolios fall at a measured and predictable pace, because the Eurosystem will no longer reinvest the main payments from the adolescence.”
Market reaction to EBC political decisions
EUR/USD has withdrawn slightly with an immediate response to ECB policy ads. At the time of the press, the couple dropped by 0.42% on 1.1350.
Euro price today
The table below shows the percentage change in the euro (EUR) in relation to the main currencies. The euro was the weakest in relation to the dollar of New Zealand.
| USD | EUR | GBP | JPy | BOOR | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.38% | 0.12% | 0.48% | 0.19% | 0.09% | -0.11% | 0.62% | |
| EUR | -0.38% | -0.31% | 0.08% | -0.24% | -0.32% | -0.54% | 0.20% | |
| GBP | -0.12% | 0.31% | 0.38% | 0.08% | -0.01% | -0.22% | 0.52% | |
| JPy | -0.48% | -0.08% | -0.38% | -0.32% | -0.42% | -0.71% | 0.11% | |
| BOOR | -0.19% | 0.24% | -0.08% | 0.32% | -0.07% | -0.30% | 0.45% | |
| Aud | -0.09% | 0.32% | 0.00% | 0.42% | 0.07% | -0.21% | 0.52% | |
| NZD | 0.11% | 0.54% | 0.22% | 0.71% | 0.30% | 0.21% | 0.74% | |
| CHF | -0.62% | -0.20% | -0.52% | -0.11% | -0.45% | -0.52% | -0.74% |
The heat map shows percentage changes in the main currencies towards each other. The basic currency is collected from the left, and the quote currency is collected from the upper order. For example, if you choose the euro on the left column and go along the horizontal line to the American dollar, the percentage shift displayed in the field will represent the EUR (base)/USD (quote).
This section was published as a preview of the policy of the European Central Bank at 07:00 GMT.
- The European Central Bank is expected to reduce key rates by 25 BPS on Thursday.
- Emphasis on the ECB statement and comments from President Christine Lagarde.
- Setting the EUR/USD pair for intensive variability in ECB policy advertisements.
The European Central Bank (EBC) will announce its April interest rate on Thursday at 12:15 GMT. Markets widely expect the central bank to reduce key rates for the sixth time in a row.
President of ECB Christine Lacard Will organize a press conference at 12:45 GMT. At this conference he will give a prepared statement on monetary policy and answer media questions.
Euro (EUR) remains prepared for a enormous reaction to ECB’s ads against American dollar (USD).
What can you expect from the decision of the European Central Bank?
The ECB is to provide another 25 base points (BPS) after the April political meeting, reducing the comparative rate in the deposit facility to 2.25% from 2.5%, with the disinfection process remained on the right track.
Data published by Eurostat showed that the harmonized consumer price indicator (HICP) in Euro zone In March it increased by 2.2% year -on -year (r.), After registration of the enhance by 2.3% in February. In addition, the annual HICP inflation core has softened to 2.4% from 2.6% in the same period.
Investors will examine the political statement to see how EBC expects the novel United States Trade System affect inflation prospects and growth prospects in the European Union (EU).
Browsing the April meeting of the ECB, TD Securities analysts said that they were forecast by lowering rates by 25 BPS. “The key emphasis at the press conference should consist of economic uncertainty regarding commercial policy and global demand in the future. Therefore, the formulation on the future path the rate may be unclear and dependent on stressful data,” noted analysts.
Earlier this month, a member of the ECB Gediminas Šimkus council argued that tariff decisions in the US justify a more accommodating monetary policy and added that in April you would need 4 BPS cuts. Although the United States and the EU have agreed to a 90-day pause in mutual tariffs since then, there are still many uncertainty about what EU-US trade relations will look like after a grace period. Referring to people familiar with discussions, Bloomberg announced at the beginning of this week that the EU expected that most American import tariffs would remain in place after slight progress in negotiations that took place on Monday.
How can the ECB meeting affect EUR/USD?
EUR/USD gained over 4% in March and has already increased by about 5% since the beginning of April. During this period, the intensive pressure of the sales of the American dollar (USD) in the matter of growing fears against the deterioration of the economic situation as a result of deepening trade conflicts propelled the rally of the couple.
In the event that the statement of ECB policy or President Lagarde suggests that they remain sure that the process of disinfection of resume, despite tariff uncertainty, investors could see this as a sign of further and securing politics in the near future. Pessimistic tone of O Economic perspectives It can confirm this view. In this scenario, the euro can be under sales pressure with an immediate reaction, opening the door to the correction down in EUR/USD.
On the other hand, euro It can still exceed USD if ECB places more emphasis on the risk of inflation and signals a possible pause of rate reduction, citing the need for more time to assess the impact of tariffs.
Eren Sengezer, leading analyst at the European session in Fxstreetoffers brief technical perspectives for EUR/USD:
“EUR/USD trades near the upper limit of the two -month growing regression channel, and the relative strength rate (RSI) on the daily table is above 70, which suggests that the couple can organize a technical correction before the next higher leg.”
“On the other hand, the central point of the growing channel is in line with the key support level of 1.1200. If EUR/USD approaches this level, 1,1100 (static level) can be perceived as transitional support before 1.1000 (psychological level, 20-day straight moving average). Searching for northern, resistance could be seen at 1.1435 (upper boundary of the growth canal),, 1.1500 (psychological level, static level).
FAQ euro
The euro is the currency of 19 European Union countries, which belong to the euro area. This is the second most frequently commercial currency in the world behind the American dollar. In 2022, it accounted for 31% of all currency transactions, with an average daily turnover of over USD 2.2 trillion per day. EUR/USD is the most rotating currency pair in the world, which is about a 30%discount on all transactions, followed by EUR/JPy (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (EBC) in Frankfurt, Germany is a bank reserve bank. EBC sets interest rates and manages monetary policy. The main mandate of the ECB is to maintain price stability, which means either controlling inflation or stimulating growth. Its main tool is to enhance or reduce interest rates. Relatively high interest rates – or waiting for higher feet – will usually bring the benefits of the euro and vice versa. The ECB Managing Council makes decisions regarding monetary policy at meetings taking place eight times a year. Decisions are made by the heads of national banks of the euro area and six enduring members, including the President of EBC, Christine Lagarde.
Data on inflation in the euro area, measured by a harmonized consumer price indicator (HICP), are an significant econometric for the euro. If inflation increases more than expected, especially if it is above the target 2% EBC, it obliges EBC to raise interest rates to restore it to control. Relatively high interest rates compared to its counterparts will usually benefit the euro, because it makes the region more attractive as a place for global investors to park their money.
The data release the health of the economy and can affect the euro. Indicators such as GDP, PMI production and services, surveys regarding employment and consumer moods can affect the direction of the common currency. A forceful economy is good for the euro. It not only attracts more foreign investment, but can encourage EBC to set interest rates, which will directly strengthen the euro. Otherwise, if economic data is frail, the euro will probably fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are particularly significant because they constitute 75% of the euro area economy.
Another significant issue of data for the euro is the commercial balance. This indicator measures the difference between what the country earns on exports and what spends on imports in a given period. If the country generates a highly sought after export, its currency will gain value only from additional demand created by foreign buyers trying to buy these goods. Therefore, a positive net trade balance strengthens currency and vice versa for a negative balance.
