

EBC Markets Briefing | Euro down with ECB turning hawkish

The euro dipped on Tuesday s Washington and Beijing remained locked in trade talks that left markets unsettled. China-Europe trade maintained growth momentum in Q1 despite headwinds. The ECB cut interest rates as expected on Thursday but hinted at a pause in its year-long easing cycle given inflation within target. Markets sees a just one more rate cut toward the end of the year, possibly in December. The central bank is "nearly done" cutting interest rates if inflation settles at 2% as expected and any surprises in growth and inflation data would "affect" the policy path, Boris Vujcic said on Saturday. Ongoing trade tensions escalated by Washington are a shock to the global economy, meaning the Fed's and the ECB's monetary policies are unlikely to diverge for long, Isabel Schnabel said. The latest interest-rate moves prime policymakers to meet medium-term inflation goal but what lies ahead of them "will be delicate and very uncertain," President Christine Lagarde said in an interview. The EU is likely to retaliate against any permanent US tariffs, raising the cost of trade. Firms could relocate some activity to avoid trade barriers but changes to supply chains are also likely to raise costs.

The euro rebounded from its previous low around 1.1387. The range trading may well continue, so we see the common currency keep going north with initial resistance at 1.1411. EBC Forex Market Analysis Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC Industry In-depth Analysis or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

Learn more

Contact:

mkt@ebc.com

Disclaimer:

Investment involves risk. The content of this report is not an investment advice and does not constitute any offer or solicitation to offer or recommendation of any investment product.

Publication date:

2025-06-10 07:47:05 (GMT)

The terms and conditions of use set out below (referred to as "FX Blue's Terms"), form a contractual agreement governing FX Blue's relationship with you in relation to your use of this Website (“Agreement”) and you agree to be legally bound by FX Blue's Terms just as if you had signed this Agreement. By using this Website and any Information, you are agreeing to comply with and be bound by FX Blue's Terms, including any revisions that may be made to FX Blue's Terms from time to time. FX Blue reserves the right, in FX Blue's sole discretion, to change, modify, add or remove portions of FX Blue's Terms at any time by posting the revisions on the Website. You should check FX Blue's Terms periodically for changes as by using the Website after FX Blue posts any changes to FX Blue's Terms, you are agreeing to accept those changes, whether or not you have reviewed them, and you waive any right you may have to receive individualised notice of such changes. FX Blue's Terms may be supplemented by additional terms and conditions pertaining to specific content and activities. You agree and understand that such additional terms and conditions are hereby incorporated by reference to FX Blue's Terms. Your continued use of the Website means that you accept any new or modified FX Blue Terms.

​EBC Markets Briefing | Euro down with ECB turning hawkish

EBC Markets Briefing | Euro down with ECB turning hawkish