The European Central Bank has just announced a 10 basis point rate cut to the bank’s deposit rate. This will bring the ECB Deposit rate down to -.3% from -.2%, and will go into effect on December 9th.
This morning’s release was not without drama. Approximately eight minutes ahead of the release, the Euro spiked higher against most major currencies, as a report came out from a major media outlet that the ECB was going to leave the deposit rate unchanged. This created a spike that saw prices in EUR/USD run higher by as much as 140 pips going into the release.
But when the data hit at 7:45 AM EST, we did get that deposit rate cut from the ECB, albeit only 10 basis points versus the expectation of a 15 basis point cut that many were looking for. So, the leaked report turned out to be false, but the Euro is still trading higher on the back of a weaker rate cut than what many were expecting.
The Euro is continuing to run higher, and the ECB press conference begins at 8:30 AM EST. This should be a fun one.
Created with Marketscope/Trading Station II; prepared by James Stanley
— Written by James Stanley, Analyst for DailyFX.com
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