The euro slipped below $1.038 to a two-week low as weak economic data reinforced expectations of further ECB rate cuts.
Euro falls on weak data, ECB cut bets
Germany’s unemployment rate increased in January, highlighting persistent economic challenges, while French inflation rose slightly less than anticipated. Additionally, data from German states signaled easing price pressures, prompting money markets to lower their forecast for the ECB’s deposit rate to 1.93% by December 2025, down from 2.05%. This shift followed the ECB’s fourth consecutive rate cut, as the central bank maintained confidence in the disinflation trend despite lingering inflationary pressures in the services sector.
Fed holds rates, signals possible pause
In contrast, the Federal Reserve held rates steady on Wednesday, suggesting a potential pause in its monetary tightening cycle.
