The euro fell to its lowest levels in more than two months on Thursday ahead of the expected interest rate cut by the European Central Bank, as weak economic data in the eurozone and dovish comments by ECB officials prompted traders to place expectations that the ECB will provide a third rate cut since last June, reducing the attractiveness of the euro against most currencies.
The ECB is expected to cut deposit rates by a quarter of a point, followed by the press conference of the bank's Governor Christine Lagarde, which we are waiting for clues on future moves, and whether her tone will be hawkish or lenient.
Some analysts believe that President Christine Lagarde's statements are often unhelpful and always take a neutral approach.
Forecasts indicate that the ECB may not commit to further rate cuts and therefore the impact on the euro will not be significantly negative after the decision to cut today.
The markets are pricing in approximately 3 interest rate cuts through March 2025.
