Home Daily Commentaries ECB holds interest rates

ECB holds interest rates

Alex Hartley
Written by
Alex Hartley

Alex Hartley

OFXpert

Driven by a passion for currency markets and data movement, Alex finds great appeal in the dynamic nature of the industry.

| Friday 26 January, 2024

Daily Currency Update

The European Central Bank (ECB) kept interest rates unchanged on Thursday and no hints were given on future decisions by President Christine Lagarde. Interest rates remain at a record high of 4%, with it being premature to discuss rate cuts. Lagarde recognised that inflation has fallen faster than the ECB had expected last autumn, which has indicated to market participants that the first rate cut will be sooner, rather than later.

Sterling has pushed back up to recent highs of 1.1720 against the Euro, making a push for 1.1730 this morning. EUR/USD was trading just under 1.0900 ahead of the news but is now back under 1.0850.

Key Movers

There were signs of resilience in the US economy yesterday as fourth-quarter gross domestic product (GDP) beat expectations. The forecast 2% was met with 3.3% actual, beating expectations for the third consecutive month.

Market participants now await PCE price index data from the US Federal Reserve today. This will give further indication as to whether the central bank will look to cut rates in the near future. The news comes ahead of the Fed’s interest rate decision next week.

GBP/USD fell to 1.2680 earlier this morning, but it’s now on the rise at around 1.2730. EUR/USD trades around 1.0850.

Expected Ranges

  • GBP/USD: 1.2660 - 1.2770 ▲
  • GBP/EUR: 1.1680 - 1.1750 ▲
  • GBP/AUD: 1.9240 - 1.9370 ▲
  • EUR/USD: 1.0780 - 1.0890 ▲

Written by

Alex Hartley

OFXpert

Driven by a passion for currency markets and data movement, Alex finds great appeal in the dynamic nature of the industry. With over 20 years of experience, Alex works closely with businesses to understand their foreign exchange requirements and align them with solutions. Placing a strong emphasis on customer service, he takes pride in nurturing long-lasting relationships with clients.