EURUSD Analysis 19-July-2024

EUR/USD—The euro declined to $1.088 on Thursday after reaching a four-month high of $1.094 the previous day. This change occurred as investors evaluated the European Central Bank’s (ECB) policy decisions for the rest of the year.

EURUSD Analysis 19-July-2024

ECB Holds Interest Rates Steady in July

During their July meeting, the ECB decided to keep its key interest rates steady, a move anticipated by many. This decision came after a significant rate cut in the previous month. It highlighted the ECB policymakers’ uncertainty about whether inflation in the Eurozone is decreasing quickly enough to justify easing monetary policy.

ECB President Christine Lagarde did not provide clear guidance for future meetings and mentioned that the September decision is still undecided. Despite this, many in the market believe that the ECB might cut interest rates again soon.

This expectation is based on the idea that if inflation weakens, the ECB could focus more on supporting economic growth. The current economic situation, balancing inflation concerns and growth, suggests that the ECB’s actions will be closely watched in the coming months.