London (awp/afp) – The euro remains almost stable against the dollar on Friday, in a sluggish foreign exchange market, despite the ECB’s decision to lower its key rates the day before, the institution’s cautious approach to possible future declines supporting the currency.
Around 10:40 a.m. GMT (12:40 p.m. CET), the euro gained barely 0.01% against the greenback, at 1.0892 dollars for one euro, and lost some 0.02% against the pound, at 85.11 pence for a Euro.
After an unprecedented phase of monetary tightening, the European Central Bank (ECB) lowered its key rates on Thursday, the reference rate going from 4% to 3.75%.
This decision was widely expected by the market.
For Mr. Wilson, it is also “interesting” to note that “the ECB has chosen to reduce its rates despite recent data on inflation” in the euro zone.
From a peak of 10.6% over one year in October 2022, inflation fell to 2.4% in March and April, before rebounding slightly to 2.6% in May.
The monetary institution has “remained rather vague as to the next steps”, notes Neil Wilson of Finalto, the president of the central bank Christine Lagarde having suggested that the institute should exercise caution in terms of rate policy on Thursday .
The speed and duration of future ECB rate cuts are still “very uncertain”, she warned.
These comments provide support for the single currency and prevent it from losing ground after the rate cut, believes Ipek Ozkardeskaya, analyst at Swissquote.
Friday lessons Thursday lessons
————————————
10:40 a.m. GMT 9:00 p.m. GMT
EUR/USD 1.0892 1.0890
EUR/JPY 169.39 169.46
EUR/CHF 0.9690 0.9684
EUR/GBP 0.8511 0.8514
USD/JPY 155.52 155.61
USD/CHF 0.8896 0.8893
GBP/USD 1.2796 1.2791
emb/ved/clc
