ECB Poised for Third Rate Cut Amid Falling Inflation
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Daily Currency Update
The European Central Bank (ECB) is expected to announce its third rate cut of the year today, positioning it ahead of the Bank of England in monetary easing. With eurozone inflation estimated to have fallen below the ECB’s 2% target in September, pressure on policymakers to take action is growing. Traders anticipate a quarter-point reduction in the ECB’s deposit rate, lowering it to 3.25%.ECB President Christine Lagarde is likely to signal the possibility of further cuts in December, which could weigh on the euro and push EUR/USD lower as investors adopt a more dovish outlook on the eurozone. On the other hand, the ECB’s proactive approach might benefit eurozone exporters by enhancing trade competitiveness through a weaker euro.
Key Movers
The US dollar has strengthened due to strong economic data and reduced expectations for aggressive Federal Reserve rate cuts. Additionally, rising uncertainty over a potential victory by Republican presidential candidate Donald Trump in next month’s election has further bolstered the dollar, as investors seek safe-haven assets. This increased demand has pushed the dollar higher against other major currencies.Expected Ranges
- GBP/USD: 1.2925 - 1.3025 ▼
- GBP/EUR: 1.1935 - 1.1995 ▲
- GBP/AUD: 1.9405 - 1.9495 ▲
- EUR/USD: 1.0805 - 1.0895 ▼