The euro slipped below $1.05, nearing the two-year low of $1.04 reached in late November, after the European Central Bank (ECB) cut its benchmark interest rates as anticipated and indicated more cuts ahead.
Euro approaches two-year low against dollar
All three key rates were lowered by 25 basis points, marking the fourth reduction in the current cycle, amid continued signs of easing underlying inflation in the eurozone. The ECB also removed its reference to maintaining restrictive rates to combat inflation.
New ECB outlook
Additionally, the central bank downgraded its GDP growth forecasts, reducing the current year's projection by 0.1 percentage points to 0.7% and next year's by 0.2 percentage points to 1.1%, falling well short of US growth expectations. Political uncertainty in France and Germany has added further pressure on the euro.
