The European Central Bank keeps interest rates unchanged but remains cautious about interest rate cuts.

It is expected that the European Central Bank will maintain interest rates at record high levels for the fourth consecutive time later today.

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How did the markets react amid traders’ anticipation

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Amid concerns about the impending recession and continued deflation despite persistently high core inflation pressures,
the interest rate on main refinancing operations is likely to remain at its highest level in 22 years at 4.5%,
while the deposit interest rate is expected to stay steady at its all-time high of 4%.

Investor focus will shift towards the new economic outlook of the central bank,
which is expected to indicate a decline in economic growth and inflation for the coming year.
Additionally, investors will look to the press conference of the European Central Bank President,
Christine Lagarde, for any hints regarding the possible timing of interest rate cuts.

Lagarde is expected to reiterate the need for further evidence that inflation is under control
and that the pace of wage increases is slowing before considering adjustments to monetary policy.

How did the markets react amid traders’ anticipation

European stock markets declined with the Stoxx 50 and Stoxx 600 broader indices falling by 0.3%,
as investors remained cautious ahead of the European Central Bank’s monetary policy decision.

As for the Euro, it rose against the US dollar to its highest level in 4 weeks at 1.09. Over the past four weeks,
the Euro increased by 1.08% against the US dollar, and over the last 12 months, it rose by 3.23%.

The European Central Bank keeps interest rates unchanged

The European Central Bank keeps interest rates unchanged

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