The euro showed a cautious decline on Thursday as the market braces for a potential third interest rate cut by the European Central Bank (ECB) within hours. In the morning, the euro fell by 0.09% against the US dollar, trading at $1.0852 per euro after earlier hitting a new low in early August at $1.0849. It also weakened by 0.04% against the British pound, now standing at 83.58 pence per euro.
Market expectations suggest that the European monetary authority is likely to implement another quarter-point reduction in its key interest rate on Thursday, following cuts made in June and September. Analysts believe this move would indicate a shift towards more aggressive monetary easing, marking the first consecutive decrease in this cycle.
“The market has fully priced in just over two reductions of 0.25 percentage points from the ECB by the end of the year,” analysts observed, indicating that an “accommodative stance” in Thursday’s decision could further exacerbate the euro’s downward trend.
Traders will also be closely watching American economic indicators set to be released on Thursday, including retail sales for September and industrial production figures for the same month in the United States.
