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: 2025.06.24
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ECB's Villeroy: Further rate cuts still possible despite present conditions
World FX news
Breaking news
ECB's Villeroy: Further rate cuts still possible despite present conditions
New
2025.06.24 13:22
2025.06.24 13:22
2025.06.24 13:22
European Central Bank policymaker Francois Villeroy de Galhau said on Tuesday that further rate cuts are still possible despite present conditions.
Key quotes
Inflation expectations remain moderate.
Recent uptick in oil prices has partly offset the "significant" appreciation in the euro.
If Iran-Israel ceasefire is confirmed, possible for further policy accommodation in the next six months.
Oil price alone is not a sufficient enough guide for our reaction function.
A neutral rate and a terminal rate are not exactly the same thing.
We will see how things evolve.
Market reaction
At the time of press, the EUR/USD pair was up 0.22% on the day at 1.1603.
Euro FAQs
The Euro is the currency for the 19 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB's primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates - or the expectation of higher rates - will usually benefit the 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.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB's 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone's economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
Last updated
: 2025.06.24
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AUD/USD: Likely to trade between 0.6385 and 0.6555 - UOB Group
Overbought advance in Australian Dollar (AUD) could test 0.6505 before leveling off against US Dollar (USD); 0.6555 is not expected to come into view.
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2025.06.24 18:12HUF: NBH must increase hawkishness to protect FX - ING
The National Bank of Hungary is likely to leave rates unchanged today at 6.50% in line with market expectations, ING's FX analyst Frantisek Taborsky notes.
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2025.06.24 18:08ECB's Villeroy: ECB could still cut rates despite oil market volatility
European Central Bank (ECB) policymaker Francois Villeroy de Galhau told the Financial Times on Tuesday that the ECB could still cut rates despite the volatility seen in the oil market, per Reuters.
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2025.06.24 18:06EUR/HUF tests 405 hurdle after trendline rebound - Société Générale
EUR/HUF is staging a tentative rebound after defending key trendline support near 398. However, the 200-DMA and upper band of its recent range at 405 remain a critical test.
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2025.06.24 18:00Powell to outline Fed's rate cut path in testimony before US Congress
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2025.06.24 18:00GBP/USD: Likely to trade in a range of 1.3420/1.3655 - UOB Group
There is a chance for Pound Sterling (GBP) to test 1.3580 before the risk of a pullback increases. In the longer run, outlook appears mixed; GBP could trade in a range of 1.3420/1.3655 for now, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
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2025.06.24 17:59USD/CAD remains supported above 1.3700 ahead of Canada's CPI release
The US Dollar retreated against its Canadian Counterpart on Monday as Trump's announcement of a ceasefire in the Middle East boosted risk appetite.
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2025.06.24 17:48USD: Fed independence risks can take over now - ING
Markets are materially scaling back geopolitical risk as President Trump declared that a ceasefire between Iran and Israel is in place following measured retaliatory strikes on US positions in Qatar yesterday.
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2025.06.24 17:44EUR/USD: Likely to trade between 1.1480 and 1.1660 - UOB Group
Sharp rally may extend further; overbought conditions suggest Euro (EUR) is unlikely to break clearly above 1.1620.
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2025.06.24 17:37WTI trades lower around $66.00, downside appears further due to easing supply concerns
West Texas Intermediate (WTI) Oil price extends its losses for the second successive day, trading around $66.30 during the European hours on Tuesday. Crude Oil prices lose ground due to easing concerns over supply disruptions, driven by the ceasefire agreement between Israel and Iran.
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2025.06.24 17:35Disclaimer:
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