The EURUSD pair is trading close to the $1.04 level after the European Central Bank’s widely expected decision to reduce interest rates by 25 basis points.This marks the fourth consecutive rate cut in the current monetary easing cycle, driven by persistent signs of weak core inflation across the eurozone.
Downgraded Growth Projections
Alongside its monetary policy adjustments, the ECB revised its GDP growth projections downward.The forecast for the current year was reduced by 0.1 percentage points to 0.7%, while next year’s growth outlook was trimmed by 0.2 percentage points to 1.1%.
Eurozone Lags Behind the U.S.
The updated economic outlook highlights the eurozone’s underperformance compared to the United States, further amplifying concerns over the region’s growth prospects.
Political Uncertainty Adds Pressure
Adding to the euro’s struggles, political instability in major economies such as Germany and France has weighed heavily on investor sentiment, exacerbating the currency’s recent decline.More By This Author:EURUSD: All Eyes On US CPI And EU Rate Decision 2024 World Elections: Lessons For New TradersThis Week: US Inflation, Major Central Bank Decisions And China Stimulus
