Today, all attention is on the European Central Bank (ECB) as it prepares to reveal its latest interest rate decision. Market forecasts are expecting a 0.25% cut, which will mark the second reduction to reverse 10 interest rate hikes since July 2022, which were used to drive down stubborn inflation.
After the rate announcement, focus will quickly turn to ECB President Christine Lagarde’s speech. Investors are particularly interested in hearing her outlook for the rest of the year, especially regarding the possibility of further rate cuts. Her comments will provide critical insight into the ECB’s future policy direction.
The ECB is the first of several major central banks to announce rate decisions this month. The U.S. Federal Reserve will release its announcement the day before the Bank of England, with markets expecting a 0.25% cut from the Fed. The Bank of England’s decision will follow on Thursday, though opinions are divided on whether a rate cut will occur.
These announcements are expected to heighten market volatility, particularly across major currency pairs. Investors will be closely monitoring exchange rate movements in response to central bank actions.
Currently, the British pound has dropped nearly 200 points against the U.S. dollar, while remaining stable against the euro.
For additional insights on how this could affect your business or to capitalise on market volatility – please reach out to speak to one of our experts.
