FRANKFURT (dpa-AFX) -The exchange rate of the euro EU0009652759 remained under pressure on Monday. In the morning, the common currency was trading at 1.1064 US dollars, slightly lower than on Friday evening. The European Central Bank (ECB) last set the reference rate at 1.1103 dollars on Friday afternoon.
Investors are already looking ahead to the European Central Bank’s (ECB) interest rate meeting on Thursday. The markets have already priced in an interest rate cut of 0.25 percentage points. However, the further path of interest rates after that is unclear. According to experts at Landesbank Hessen-Thüringen (Helaba), one or two further interest rate cuts of this magnitude are expected by the end of the year. “It therefore depends in particular on the communication from ECB President Lagarde.”
The US labor market report, which is important for the US central bankers, did not provide the clarity that market participants had hoped for on Friday. The experts at Metzler Bank therefore saw nervous upward and downward movements in yields on the market. “Overall, however, the figures from the last few weeks underline our expectation of an interest rate cut of 0.25 percentage points for the Federal Reserve meeting on September 18.”
There are only a few economic data items on the agenda for investors to use as a guide during the day. The Sentix index could provide some impetus in the morning. The economic indicator for the Eurozone provides initial indications of the mood in September.
ECB exchange rates
Table of Contents
The Euro’s Exchange Rate and Interest Rates: What’s Next for the European Central Bank (ECB)?
The euro’s exchange rate has been under pressure, with the common currency trading at 1.1064 US dollars on Monday, slightly lower than on Friday evening. The European Central Bank (ECB) had set the reference rate at 1.1103 dollars on Friday afternoon [[1]]. As investors look ahead to the ECB’s interest rate meeting on Thursday, questions arise about the future of interest rates and their impact on the euro’s exchange rate.
Current ECB Interest Rates
The ECB currently sets three official interest rates as part of its monetary policy to steer the provision of liquidity to the banking sector. These rates are reviewed every six weeks [[3]]. As of June 12, 2024, the fixed rate on the main refinancing operations stands at 4.25%, while the rate on the marginal lending facility is 4.50% [[1]].
Market Expectations: Interest Rate Cuts Ahead?
Markets have already priced in an interest rate cut of 0.25 percentage points ahead of the ECB’s meeting on Thursday. Experts at Landesbank Hessen-Thüringen (Helaba) expect one or two further interest rate cuts of this magnitude by the end of the year [[2]]. However, the path forward for interest rates is unclear, and investors are eagerly awaiting communication from ECB President Lagarde.
Euro Area Yield Curves: A Key Indicator
The ECB publishes several yield curves, which are updated every TARGET business day at noon (12:00 CET) [[2]]. These curves provide valuable insights into the market’s expectations of future interest rates and can influence the euro’s exchange rate.
The Role of the US Labor Market Report
The US labor market report is a crucial indicator for the US central bank, and its impact can be felt across the Atlantic. As the global economy is increasingly interconnected, changes in US interest rates can influence the euro’s exchange rate and the ECB’s monetary policy decisions.
Conclusion
The euro’s exchange rate and interest rates are closely intertwined, and the ECB’s upcoming meeting will be closely watched by investors. As market expectations shift and new data emerges, the euro’s exchange rate will likely continue to fluctuate. Stay tuned for updates on the ECB’s interest rate decisions and their impact on the euro’s exchange rate.
References:
<a href="https://www.ecb.europa.eu/stats/financialmarketsandinterestrates/euroareayieldcurves/html/index.en.html”>[2]
<a href="https://www.ecb.europa.eu/stats/policyandexchangerates/keyecbinterest_rates/html/index.en.html”>[3]
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European central bank exchange rate
The Euro’s Exchange Rate and Interest Rates: What’s Next for the European Central Bank (ECB)?
The euro’s exchange rate has been under pressure, with the common currency trading at 1.1064 US dollars on Monday, slightly lower than on Friday evening. The European Central Bank (ECB) had set the reference rate at 1.1103 dollars on Friday afternoon [[1]]. As investors look ahead to the ECB’s interest rate meeting on Thursday, questions arise about the future of interest rates and their impact on the euro’s exchange rate.
Current ECB Interest Rates
The ECB currently sets three official interest rates as part of its monetary policy to steer the provision of liquidity to the banking sector. These rates are reviewed every six weeks [[3]]. As of June 12, 2024, the fixed rate on the main refinancing operations stands at 4.25%, while the rate on the marginal lending facility is 4.50% [[1]].
Market Expectations: Interest Rate Cuts Ahead?
Markets have already priced in an interest rate cut of 0.25 percentage points ahead of the ECB’s meeting on Thursday. Experts at Landesbank Hessen-Thüringen (Helaba) expect one or two further interest rate cuts of this magnitude by the end of the year [[2]]. However, the path forward for interest rates is unclear, and investors are eagerly awaiting communication from ECB President Lagarde.
Euro Area Yield Curves: A Key Indicator
The ECB publishes several yield curves, which are updated every TARGET business day at noon (12:00 CET) [[2]]. These curves provide valuable insights into the market’s expectations of future interest rates and can influence the euro’s exchange rate.
The Role of the US Labor Market Report
The US labor market report is a crucial indicator for the US central bank, and its impact can be felt across the Atlantic. As the global economy is increasingly interconnected, changes in US
