Markets await ECB interest rate decision
Written by
Daily Currency Update
The euro was sold off yesterday amid renewed concerns about the economic health of the bloc. News that China may weaken the yuan throughout 2025 to counter potential US trade tariffs under President-elect Trump caused EUR/USD to dip below 1.05. GBP/EUR reached its highest level since March 2022, hitting 1.2159. If the pair rises above 1.2191, it could open the door for further gains, reaching levels not seen since the post-Brexit sterling sell-off in June 2016. Currently, EUR/USD is hovering around 1.05, while GBP/EUR has slightly fallen to 1.2140.Key Movers
Today's main event is the European Central Bank's latest interest rate decision, with a 25 basis point cut widely expected by markets. As usual, the messaging from ECB President Christine Lagarde will be the key area of focus. With China potentially looking to shield itself from Trump tariffs by weakening its currency (which would make euro-denominated goods even more expensive) and the Trump administration considering reducing support for Ukraine and imposing tariffs on the Eurozone, the outlook for the bloc appears bleak. In the US, the latest inflation numbers came in as expected, with the Consumer Price Index for November rising 2.7% year-on-year. A 25 basis point rate cut from the Federal Reserve is now virtually certain on December 18th.Expected Ranges
- GBP/USD: 1.2690 - 1.2810 ▲
- GBP/EUR: 1.2080 - 1.2200 ▲
- GBP/AUD: 1.9790 - 2.0000 ▼
- EUR/USD: 1.0430 - 1.0590 ▼