EUR/USD Braces For ECB Rate Decision
EUR/USD surged on Wednesday, rising 1.75% to touch the 1.0800 level as risk sentiment improved following US President Donald Trump’s U-turn on his own tariff strategy. President Trump once again put the brakes on his own trade strategy by threatening to impose steep import taxes on his own citizens to punish other countries for a series of perceived slights by Donald Trump.
The European Central Bank (ECB) is set to cut interest rates by 25 bps on Thursday, lowering the Main Refinancing Operations Rate to 2.65% and lowering the Deposit Facility Rate to 2.5%. Despite an overall tone of weak or unbalanced growth permeating the EU’s first-quarter economic data, interest rate traders have trimmed their bets on additional ECB rate cuts throughout the rest of the year as inflation continues to prove to be a bigger problem than central planners had anticipated. The interest rate market is now pricing in less than 70bps of rate cuts for the remainder of 2025
The US ADP Employment Change for February showed just 77K new jobs, well below the 140K forecast and the 186K in March. However, the ADP result has consistently failed to correlate with Nonfarm Payrolls (NFP) since the reporting change in 2022, suggesting the weak performance is not significant.
Source: FXStreet
