Select Language

EUR/USD trades cautiously around 1.1400 ahead of ECB's interest rate policy

Breaking news

EUR/USD trades cautiously around 1.1400 ahead of ECB's interest rate policy

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
New update 2025.06.05 12:20
EUR/USD trades cautiously around 1.1400 ahead of ECB's interest rate policy

update 2025.06.05 12:20

  • EUR/USD is expected to remain on the sidelines around 1.1400 ahead of the ECB's monetary policy announcement.
  • The ECB is expected to lower its Deposit Facility Rate by 25 bps to 2%.
  • Soft US data has prompted stagflation risks, and the NFP data is in focus.

The EUR/USD pair trades with caution, slightly above the key level of 1.1400 during Asian trading hours on Thursday. The major currency pair is expected to remain sideways, with investors awaiting the European Central Bank's (ECB) interest rate decision announcement at 12:15 GMT.

The ECB is almost certain to reduce its key borrowing rates by 25 basis points (bps), a move that will lower the Deposit Facility Rate and Main Refinancing Operations Rate to 2% and 2.15%, respectively. This will be the seventh consecutive interest rate cut by the ECB and the eighth since June last year, when it initiated its monetary expansion cycle.

Traders are increasingly confident about a seventh consecutive ECB interest rate cut as the disinflation trend in the Eurozone is intact. Preliminary Eurozone Harmonized Index of Consumer Prices (HICP) data showed on Tuesday that inflationary pressures fell below the central bank's target of 2%.

As the Fed is widely anticipated to lower interest rates, investors will pay close attention to ECB President Christine Lagarde's press conference to get cues about the likely monetary policy stance for the second half of the year. Market participants would also like to know the status of trade negotiations with the United States (US).

Meanwhile, the US Dollar (USD) struggles to hold ground near the six-week low as weak US data has renewed stagflation risks. The ISM Services Purchasing Managers' Index (PMI) data unexpectedly declined in May, while its sub-components indicated that input costs continued to expand at a faster pace. The ADP Employment Change data, which reflects labor demand in the private sector, showed the addition of fresh 37K workers in May, the lowest reading seen since February 2021.

US President Donald Trump criticized the Federal Reserve (Fed) again for maintaining a restrictive monetary policy stance after weak private employment data.

Going forward, investors will focus on the US Nonfarm Payrolls (NFP) data for May, which is scheduled to be released on Friday.

Economic Indicator

ECB Rate On Deposit Facility

One of the European Central Bank's three key interest rates, the rate on the deposit facility, is the rate at which banks earn interest when they deposit funds with the ECB. It is announced by the European Central Bank at each of its eight scheduled annual meetings.

Read more.

Next release: Thu Jun 05, 2025 12:15

Frequency: Irregular

Consensus: 2%

Previous: 2.25%

Source: European Central Bank


Date

Created

 : 2025.06.05

Update

Last updated

 : 2025.06.05

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

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?

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.
Thank you for your feedback.

Most viewed

GBP/JPY Price Forecast: Bullish momentum builds after rising above 195.00

The Japanese Yen (JPY) continues to weaken against the British Pound (GBP) on Friday, with the GBP/JPY pair edging up to near 195.20 at the time of writing. 
New
update2025.06.06 22:09

USD/INR slips as RBI delivers surprise 50 bps interest-rate cut, markets cheer dovish pivot

The Indian Rupee (INR) strengthens slightly against the United States Dollar (USD) on Friday, despite a surprise 50-basis-point (bps) interest-rate cut by the Reserve Bank of India (RBI).
New
update2025.06.06 21:17

Gold treads water with US NFP and US-China trade talks in focus

Gold (XAU/USD) has fallen back into a narrow range of consolidation on Friday, trading around $3,363 at the time of writing and with Investors remaining on high alert ahead of the Nonfarm Payrolls (NFP) report release.
New
update2025.06.06 21:13

IEA expects rising investments in low-emission energies, decline in Oil investments - Commerzbank

The International Energy Agency published a report on investments in the energy sector yesterday, Commerzbank's commodity analyst Carsten Fritsch notes.
New
update2025.06.06 20:57

JPY is underperforming on the day - Scotiabank

Japanese Yen (JPY) is down 0.4% vs. the US Dollar (USD) and underperforming all of the G10 currencies in an environment of modest USD strength.
New
update2025.06.06 20:55

GBP down modestly from Thursday's multi-year high - Scotiabank

Pound Sterling (GBP) is also down 0.2% vs. the US Dollar (USD) with a modest pullback from Thursday's fresh multi-year high, Scotiabank's Chief FX Strategist Shaun Osborne notes.
New
update2025.06.06 20:52

OPEC Oil production rose less than agreed in May - Commerzbank

According to a Bloomberg survey, the nine OPEC countries bound by production targets increased Oil production by nearly 200 thousand barrels per day in May, Commerzbank's commodity analyst Carsten Fritsch notes.
New
update2025.06.06 20:48

ECB's Centeno: Tariffs imposed by US are deflationary

European Central Bank (ECB) policymaker Mario Centeno said on Friday that that the tariffs imposed by the United States will have a deflationary effect in the Eurozone, per Reuters.
New
update2025.06.06 20:37

CAD little changed ahead of jobs data - Scotiabank

The Canadian Dollar (CAD) is little changed against the generally stronger USD on the session and out-performing its G10 peers as a consequence, Scotiabank's Chief FX Strategist Shaun Osborne notes.
New
update2025.06.06 20:32

USD/JPY extends recovery to near 144.00 ahead of US NFP data

The USD/JPY pair rises further to near 144.00 during European trading hours on Friday, following the previous day's recovery move. The pair strengthens as the US Dollar (USD) extends recovery ahead of the United States (US) Nonfarm Payrolls (NFP) data for May, which will be published at 12:30 GMT.
New
update2025.06.06 20:32

Disclaimer:arw

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.

  • Facebook
  • Twitter
  • LINE

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
share
Share
Cancel