ECB Rate Cut Lower than Expected

The ECB has always found a way to perplex analysts. After various calls from European leaders to be more proactive and help boost the economic recovery the Central Bank has cut the base rate in 25 basis points.

The European rate now stands at 1.25%. The market was expecting at least a 50 basis points cut given the deepening recession. As more and more Central Banks get near the point where the interest rate as a monetary tool is limited and have to engage in quantitative easing.

It remains to be seen if the G20 summit in London will have an effect on ECB policy going forward. The Euro has traded down after the announcement and will continue to look for direction from G20 comments.

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.