EURUSD trades near $1.04 amid ECB rate cuts

• EURUSD trades near $1.04 after ECB rate cut
   
• ECB cuts rates by 25bps for the fourth time
   
• Growth forecasts lowered to 0.7% for 2024, 1.1% for 2025
   
• Political instability in Germany and France weighs on euro

The EURUSD pair is trading close to the $1.04 level after the European Central Bank’s widely expected decision to reduce interest rates by 25 basis points.

This marks the fourth consecutive rate cut in the current monetary easing cycle, driven by persistent signs of weak core inflation across the eurozone.
 

• Downgraded Growth Projections

Alongside its monetary policy adjustments, the ECB revised its GDP growth projections downward.

The forecast for the current year was reduced by 0.1 percentage points to 0.7%, while next year’s growth outlook was trimmed by 0.2 percentage points to 1.1%.

• Eurozone Lags Behind the U.S.

The updated economic outlook highlights the eurozone’s underperformance compared to the United States, further amplifying concerns over the region's growth prospects.

• Political Uncertainty Adds Pressure

Adding to the euro's struggles, political instability in major economies such as Germany and France has weighed heavily on investor sentiment, exacerbating the currency’s recent decline.