The European Central Bank is unlikely to cut its policy rate as it sees limited benefits from reduced rates, Reuters reported on Friday, citing sources familiar with discussions.
The ECB is focusing on financing conditions, including bond prices and lending rates in policy discussion, much less on the exchange rate, sources further noted. “Even if you see a much bigger appreciation, I would not infer that the unique answer to that is the interest rate,” one of the policymakers told Reuters.
Market reaction
The EUR/USD pair edged higher on this headline and was last seen gaining 0.05% on the day at 1.2126.
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