ECB

Major central banks may further adjust monetary policy in 2025 as the European Central Bank (ECB) insists that ‘the disinflation process is well on track,’ but the Federal Reserve may change gears at a slower pace as Chairman Jerome Powell and Co. forecast less rate-cuts for next year.

Traders are eyeing the European Central Bank, which is set to announce its interest rate decision tomorrow. Market participants are eager to see if the ECB will maintain its cautious stance or signal any changes in policy amid the ongoing economic challenges in the Eurozone. This week’s developments could set the tone for EUR/USD outlook in the coming weeks.

EUR/USD snaps the series of higher highs and lows from last week after attempting to trade back above the former-support zone around the April low (1.0601).

Ahead of key macro events, the EUR/USD forecast remains modestly bearish, although the currency pair has found some love today thanks to optimism about more stimulus measures being introduced in China, one of the Eurozone’s major exports destinations.

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EURUSD Analysis: Following a double top formation at the 1.120 resistance, EURUSD reached the target, pressured by a strong dollar and dovish ECB. Will the decline continue?

The EUR/USD held near 1.0850, near its lowest level since early August. The other euro crosses were mixed. However, the EUR/JPY forecast hadn’t quite turned bearish yet as it held above a key support and traders watched whether the USD/JPY pair would hold its latest attempt to break the 150.00 in response to a series of US data beats.

EUR/USD bears have taken a swing and the pair is now working on its 13th red day in the past 14. And before that, bulls were persistently pushing into the 1.1200 handle so the contrast is stark. The question now is how dovish the ECB sounds at tomorrow’s widely-expected rate cut.

The European Central Bank (ECB) is expected to announce a 0.25% rate cut this week, bringing the key rate down to 3.25%. This will mark the third reduction this year, followed by China's GDP data on Friday morning.

Market Update: Key Events, Movements, and Expectations Over the past 24 hours, the financial markets have witnessed significant movements, with both the Dow and S&P 500 reaching new record highs. This surge has been fuelled by strong momentum at the start of the US earnings season

EURUSD Forecast: In addition to the strength of the dollar between haven factors and moderated expectations of monetary easing, dovish expectations surrounding the ECB’s upcoming monetary policy decision are putting additional pressures on the Euro.