ECB (European Central Bank)
ECB’s Elderson: Balance of risks has clearly deteriorated
European Central Bank (ECB) Vice-Chair of the Supervisory Board Frank Elderson said during the European trading session on Wednesday that the balance of risks has clearly deteriorated due to Middle East conflicts.
Economists expect June ECB rate hike as stagflation risk stays high - Reuters poll
A Reuters poll shows that a large majority of economists expect the ECB to raise its deposit rate in June. Expectations for further monetary tightening this year have strengthened compared to the previous survey.
ECB’s Wunsch: US-Iran deal confirmation before June meeting won’t derail interest rate hike hopes
ECB policymaker and the head of Belgium's central bank, Pierre Wunsch, said in an interview with Financial Times that the likelihood of central bank tightening monetary conditions in the policy meeting next week will remain firm.
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USD/JPY sits near the April-May intervention level, around mid-160.00s
USD/JPY consolidates its recent gains to the highest level since late April, around mid-160.00s, where Japan conducted its last major FX intervention. Renewed speculations that authorities will step in again lend support to the Japanese Yen and cap the currency pair amid subdued US Dollar demand. However, economic risks stemming from the Middle East conflict keep the JPY bulls on the sidelines. Moreover, a fresh escalation of US-Iran tensions and bets for Fed rate hikes favor the USD bulls, suggesting that the path of least resistance for the pair remains to the upside.
AUD/USD vulnerable near two-month low amid escalating US-Iran tensions
AUD/USD touches a fresh low since April 13 during the Asian session on Thursday, though it lacks follow-through amid subdued US Dollar price action. However, a fresh wave of US strikes on Iran and bets that the US Fed will raise rates by the end of this year, despite soft consumer inflation figures, favor the USD bulls. Apart from this, expectations for a prolonged pause by the RBA back the case for a further depreciation in the Aussie.
Gold recovers slightly from November 2025 lows; not out of the woods yet
Gold extends the recent breakdown momentum below the 200-day SMA and plummets to its lowest level since November 2025 during the Asian session on Thursday. Renewed hostilities between the US and Iran push Crude Oil prices higher, reviving inflationary concerns and bolstering bets for more hawkish central banks. This continues to drive flows away from the non-yielding bullion, though subdued US Dollar demand helps spot prices to find some support ahead of the $4,000 psychological mark.
Bitcoin faces further downside risk amid growing short-term holder losses, weak ETF demand
Bitcoin's recent decline toward the $60,000 level has pushed the market further into bearish territory, with new investors suffering huge unrealized losses, according to a Glassnode report on Wednesday. The firm noted that Bitcoin's earlier May rally now appears increasingly as a "bear bounce".
From sizzle to fizzle: Tech sinks as Oil puts the Fed tail back on the table
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what is the ECB?
The European Central Bank (ECB) is the central bank empowered to manage monetary policy for the Eurozone. With its beginnings in Germany in 1998, the ECB's mandate is to maintain price stability in the Eurozone, so that the Euro's (EUR) purchasing power is not eroded by inflation. As an entity independent of individual European Union countries and institutions, the ECB targets a year-on-year increase in consumer prices of 2% over the medium term. Another of its tasks is controlling the money supply. This involves, for instance, setting interest rates throughout the Eurozone. The European Central Bank's work is organized via the following decision-making bodies: the Executive Board, the Governing Council and the General Council. Christine Lagarde has been the President of the ECB since November 1, 2019. Her speeches, statements and comments are an important source of volatility, especially for the Euro and the currencies traded against the European currency.
who is ECB's President?
Christine Lagarde was born in 1956 in Paris, France. Lagarde, who graduated from Paris West University Nanterre La Défense, became President of the European Central Bank (ECB) on November 1, 2019. Prior to that, she served as Chairman and Managing Director of the International Monetary Fund (IMF) between 2011 and 2019. Lagarde previously held various senior ministerial posts in the Government of France: she was Minister of the Economy, Finance and Industry (2007-2011), Minister of Agriculture and Fishing (2007) and Minister of Commerce (2005-2007).
Lagarde on How to trade the ECB interest-rate decision
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.
Prior to the rate decision:
- Many traders buy the rumors and square their positions shortly after the decision is made. For instance, if the market believes that the European Central Bank (ECB) will hike interest rates, traders buy the Euro (EUR) and close the position shortly after the announcement. On the other hand, if the expectation is a rate cut, traders will short the Euro and square the position after the announcement.
After the rate decision:
- If the market's expectations differ from the actual rate decision, there can be some excellent trading opportunities.
- If the market expects a rate hike but the European Central Bank ends up cutting rates, a short-term (1-2 hours) selling the Euro could be successful.
- If the market expects a rate cut but the ECB raises rates, a short-term long position on the Euro (1-2 hours) may be advantageous.
More generally, relatively high interest rates will usually result in a stronger Euro and vice versa.
Hike, cut or keep interest rates unchanged
The European Central Bank's (ECB) decision on interest rates always has an effect on the Euro (EUR).
When interest rates increase, the European Central Bank is selling government securities to large financial firms. In turn, the financial organizations are paying in euros for these securities. This effectively decreases the amount of currency circulating in the economy. A decreasing supply leads to higher demand and therefore causes the value of the Euro to appreciate.
When the interest rates decrease, the European Central Bank floods the market with euros. This is done by purchasing government securities from financial organizations. In return for the securities, these banks and financial deals are paid in euros, therefore increasing the supply of euros in the economy. As supply increases, the value of the Euro depreciates.
the world interest rates table
The World Interest Rates Table reflects the current interest rates of the main countries around the world, set by their respective Central Banks. Rates typically reflect the health of individual economies, as in a perfect scenario, Central Banks tend to rise rates when the economy is growing and therefore instigate inflation.
some concepts you need to know
In practical terms, QE means that central banks create money out of nothing to buy securities, such as government bonds. This new money swells the size of bank reserves by the quantity of assets purchased and that's why this programme is called Quantitative Easings. The money supply is intended to flood financial institutions with capital in an effort to stimulate lending and increase liquidity.
Much of the governments' debt is held by banks in the Eurozone and the ECB wants them to give more credits. If the European Central Bank buys government bonds, their prices rise and profitability drop even more. This is a liquidity-providing operation that weakens the value of the euro. This depreciation makes European exports cheaper and competitive, and ultimately, helps in recovering. In addition, as a result of the stimulus to internal and external consumption, the ECB combats the risk of deflation, a widespread and prolonged drop in prices, as well as the high unemployment.