ECB Governing Council, Euro Talking Points

  • ECB main interest rate remained unchanged – as expected
  • Today marks the first interest rate meeting of the Governing Council in 2022
  • Record high inflation (5.1% for January) tests the ECB’s ‘lower inflation’ forecasts
  • Slowing economic growth may be referenced in support of continued stimulus

ECB Main Refinancing Rate 0%, Deposit Facility -0.5%, Lending Facility 0.25%

ECB Leaves Interest Rate Unchanged at 0%, Highlights Flexibility of Approach

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Markets largely expected rates to remain on hold and therefore there has been little volatility in EUR/USD shortly after the announcement.

EUR/USD 5 Min Chart

ECB Leaves Interest Rate Unchanged at 0%, Highlights Flexibility of Approach

Source: IG, prepared by Richard Snow

Considering the BoE rate hike moments earlier, it’s no surprise that EUR/GBP trades slightly lower after the release.

EUR/GBP 5 Min Chart

ECB Leaves Interest Rate Unchanged at 0%, Highlights Flexibility of Approach

Source: IG, prepared by Richard Snow

— Written by Richard Snow for DailyFX.com

Contact and follow Richard on Twitter: @RichardSnowFX

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