Ultima MarketsMarket Hot Spots: The European Central Bank Slows Down the Step of Interest Rate hikes Euro exists...

since5Since the beginning of the month, the euro has been continuously depreciating against the US dollar1.1096Down to1.0705Low position. Behind this is the tension in US dollar liquidity, but it is more due to differences in market expectations for monetary policy between the European Central Bank and the Federal Reserve.

The European Central Bank 5 The main interest rate will be raised at the monthly interest rate meeting25 Basis points. Subsequently, European Central Bank Regulatory Commission Mahrouf stated to slow down the pace of interest rate hikes to the standard rate hike range（25A basis point is appropriate, indirectly indicating that the pace of policy tightening is slowing down.

Nevertheless, after seven consecutive interest rate hikes, borrowing costs have now reached 2008 year 7 The highest level since the beginning of the month. On the contrary, although inflation in the eurozone is gradually decreasing, it is still high7% Horizontal.

(Left axis blue line European Central Bank interest rate trend)vsRight axis black line Eurozone inflation rate)

European Central Bank Regulatory Commission Mahrouf5Later this month, it was also stated that the future lies in6Month and7There is a high probability that interest rates will continue to rise.UltimaMarkestInvestment Research Group AnalystElonThis potentially reflects the continued risk of economic recession, and the European Central Bank still needs to work hard to cope with high inflation. However, the market has already made it clear that the ECB's tightening policy still needs to be carried out, and potential interest rate hikes have long been digested in the appreciation trend of the euro

Meanwhile, recent financial data released by the United States has boosted market sentiment towards the Federal Reserve6The probability of a monthly interest rate hike. And in the2024The possibility of interest rate cuts before the beginning of the year is becoming increasingly small, and there is a time difference in the expected rate hikes of the two central banks, leading to short-term selling pressure on the euro against the US dollar.

(EUR USD daily chart, sourceUltima Markets MT4）

Currently, the euro has reached a critical support level against the US dollar1.07The chart shows that if it falls below, it may accelerate the descent to1.05. But there is also a possibility of a rebound and upward trend in the short term against the US dollar, considering5The monthly US non farm employment data will be released this week, and the euro/US dollar may remain volatile until Friday.

Disclaimers

The comments, news, research, analysis, pricing, and other information contained in this article can only be considered as general market information and are provided solely to assist readers in understanding the market situation and do not constitute investment advice.Ultima MarketsReasonable measures have been taken to ensure the accuracy of the data, but the accuracy of the data cannot be guaranteed and can be changed at any time without notice.Ultima MarketsWe will not be responsible for any losses or losses (including but not limited to any loss of profits) that may arise from the direct or indirect use or reliance on such information.