Economic news

Euro slides on looming ECB rate cut

On Friday the euro dropped versus a bouncing back U.S. dollar and stroke a 2-year bottom against the Swiss franc, as traders increase wagers for an ECB rate of interest trim one week from now.

euroPhoto: Flickr

Forex markets are pricing in a sharply 60 percent possibility of a 10 bp rate slice the following week, against a 40 percent chance prior in the week.

The euro's slump turned around its several increases in the past session when mild remarks from a key Fed policymaker reinforced hopes for a sharp rate-trim for the present month, harming the dollar.

Rabobank expert Jane Foley said ECB President Mario Draghi had astonished the market with mild remarks twice in 2019, although her bank's base case was still for a September trim.

The euro edged lower 0.4 percent to $1.1231.

Versus the Swiss franc, it hit a two-year bottom of 1.1033 francs per euro, down 0.3 percent on the day. The franc, seen as a safe harbor, has profited as traders become anxious about the euro area financial viewpoint.

National banks are starting another round of policy tightening trying to lift determinedly low inflation and battle signals of financial retardation.


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