Euro lower after ECB cuts interest rates
Daily Currency Update
Yesterday saw the European Central Bank's (ECB) first-interest rate decision of 2025 with policymakers lowering rates by 0.25% as expected. The confirmation of the lowering of borrowing costs saw little movement in EUR/USD and the euro rallied a little during ECB's chief, Christine Lagarde's press conference however, it soon began to slide once she had finished. Lagarde stated the eurozone was facing "headwinds" and that economic risks were "tilted to the downside" given the lack of growth and the threat of Donald Trump enacting tariffs.The euro took another leg lower yesterday evening as Trump confirmed tariffs would be implemented on Canada and Mexico this weekend, citing several reasons however, fentanyl entering the US from Canada and illegal migrants from Mexico, were the main ones. Once this decision has signed off by the President it seems China will be the next to be targeted and then we may see the EU come into his crosshairs.
Downward pressure remains on EUR/USD this morning with the pairing at 1.0370. GBP/EUR is continuing to grind slowly higher this morning, currently just above 1.1960.
Key Movers
Yesterday we saw some mixed data from the United States, with the first estimate of 2024 Q4 growth coming in a little weaker than expected at an annualised 2.3% for the quarter. This was offset by the previous quarter being revised higher and weekly unemployment claims printing a very low 207k, showing the countries ongoing labour market resilience.Today we have Personal Consumption Expenditure inflation data from the US. There is little data of note from the Eurozone or the UK, with the latter's next big event being next Thursday's interest rate decision from the Bank of England, with a 0.25% cut eyed. GBP/USD is heading lower with it now close to 1.24.
Expected Ranges
- GBP/USD: 1.2355 - 1.2475 ▼
- GBP/EUR: 1.1915 - 1.2000 ▲
- GBP/AUD: 1.9870 - 2.0025 ▲
- EUR/USD: 1.0325 - 1.0460 ▼