Skip to content EURUSD Fundamental Analysis – 13-September-2024
The Euro rose to over $1.107 (EUR/USD) as traders reacted to the European Central Bank’s (ECB) latest moves. As expected, the ECB reduced borrowing costs, reflecting recent inflation trends aligned with predictions.
Inflation Projections: What’s Next?
The ECB foresees inflation picking up again later this year but expects it to drop to its target in the second half of next year. However, core inflation strips out volatile items and is predicted to stay slightly higher through 2024 and 2025.
ECB’s Commitment to Tight Monetary Policy
The central bank emphasized that it will maintain its tight monetary policy for as long as necessary. The ECB also noted that it will make decisions based on economic data, reviewing conditions at each meeting before determining if further cuts are needed.
- Also read: USD/MXN Analysis – 12-September-2024
Traders’ Expectations for Future Rate Cuts
Although traders have reduced their expectations of a rate cut in October, they still anticipate one or two more small cuts by the end of the year.
Conclusion
The ECB’s actions and traders’ responses highlight the ongoing balancing act between managing inflation and adjusting monetary policy. While the Euro has strengthened slightly, the future of interest rates and inflation remains uncertain, with decisions heavily dependent on upcoming economic data.
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