Select Language

Portfolio

Share your portfolio and performance in real time
Events & contests

Events and contests held by retail brokers around the world

ECB's Villeroy: Middle East stress should not delay June rate cut

World FX news

Home

Breaking news

ECB's Villeroy: Middle East stress should not delay June rate cut

New

2024.04.22 08:36

ECB's Villeroy: Middle East stress should not delay June rate cut

2024.04.22 08:36

French central bank chief Francois Villeroy de Galhau said on Sunday that tension in the Middle East is unlikely to drive up energy prices and should not affect the European Central Bank's (ECB) plans to begin cutting interest rates in June, per Reuters.

Key quotes

"Barring surprises, there is no need to wait much longer."

"It should be followed by further cuts, at a pragmatic pace,"

"At the moment, the conflict is not leading to a marked rise in oil prices. If this were ever the case, we would have to analyse monetary policy for whether this shock is temporary and limited, or whether it is transmitted--beyond commodities--to underlying inflation".

Market reaction

These comments have little to no market reaction to the Euro. The EUR/USD pair is trading at 1.0659, adding 0.03% on the day.

ECB FAQs

What is the ECB and how does it influence the Euro?

The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy for the region. The ECB primary mandate is to maintain price stability, which means keeping inflation at around 2%. Its primary tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will usually result in a stronger Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

What is Quantitative Easing (QE) and how does it affect the Euro?

In extreme situations, the European Central Bank can enact a policy tool called Quantitative Easing. QE is the process by which the ECB prints Euros and uses them to buy assets - usually government or corporate bonds - from banks and other financial institutions. QE usually results in a weaker Euro. QE is a last resort when simply lowering interest rates is unlikely to achieve the objective of price stability. The ECB used it during the Great Financial Crisis in 2009-11, in 2015 when inflation remained stubbornly low, as well as during the covid pandemic.

What is Quantitative tightening (QT) and how does it affect the Euro?

Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the European Central Bank (ECB) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the ECB stops buying more bonds, and stops reinvesting the principal maturing on the bonds it already holds. It is usually positive (or bullish) for the Euro.

Created

: 2024.04.22

Last updated

: 2024.04.22

NZD/USD Price Analysis: Bulls assert dominance, closes its best week of 2024
2024.05.18 07:06
USD/JPY Price Analysis: Extends gains but remains below 156.00
2024.05.18 05:44
USD/THB plunges and approaches the 100-day SMA, USD cushioned by Fed officials
2024.05.18 04:52
USD/NOK with light losses on quiet Friday, cautious Fed supports the USD
2024.05.18 03:05
Canadian Dollar sticks to the middle on tepid Friday
2024.05.18 02:33
Mexican Peso hits four-week high on hawkish Banxico remarks
2024.05.18 02:25

Writer

FXStreet

Financial media

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?

Yes

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.

Send

Thank you for your feedback.

IMF's Gopinath: High US deficits fueling demand, global growth, higher rates and US Dollar

Gold Price Forecast: XAU/USD holds below $2,400 on Fed hawkish comments, eyes on geopolitical risks

Most viewed

Disclaimer:

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree