“It would take significant further euro strength for the cost-benefit analysis to shift towards a [an ECB] rate cut,” strategists at ABN Amro said, according to MNI’s Anthony Barton.
On Wednesday, the European Central Bank (ECB) Governing Council Member Klaas Knot, a renowned hawk, hinted that the central bank could cut interest rates to stem EUR/USD’s rise.
Further, Bloomberg cited ECB sources as saying that markets are underpricing prospects of an interest rate cut.
The ECB’s main refinancing operations, marginal lending facility, and deposit facility are 0.00%, 0.25%, and -0.50%, respectively.
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