the euro continues its fall against the dollar after the ECB rate cut

(Boursier.com) — The euro continues its tumble against the dollar after the European Central Bank lowered its interest rates for the third time this year. The single currency lost 0.39% to $1.0819 between banks, the lowest in 11 weeks. At the start of the afternoon, the ECB reduced its three key rates by a quarter of a point, as expected by the market.

A decision taken unanimously which comes in a context of weak economic growth, slowing down in the job market and easing pressure on consumer prices. A choice that reinforces market expectations that another reduction is likely when the Governing Council meets in December. The Central Bank, however, did not give any new clues on its next decision, with Christine Lagarde reaffirming that the ECB remains ‘data dependent’. “We believe that the disinflation process is on track and that all the information we have received over the last five weeks points in the same direction, namely a decline,” the leader nevertheless admitted.

Faced with a faltering economy, the ECB’s policy risks quickly moving away from that of the Fed. Enough to weigh even more on the European currency… “Faster rate cuts and weaker growth should maintain pressure on European assets. The euro in particular seems vulnerable against the dollar in this context. We are counting on a range of 1.07-1.11 on the EUR/USD parity, but this range could be lowered by 3 to 4% if the increase in customs duties becomes a real possibility after the American election”, affirms Olivier Dubs , senior manager at JP Morgan Private Bank.