ECB review: Accentuate the positive

Danske Research Team Danske Bank A/S

ECB decided to leave its key policy rates unchanged with the deposit facility rate at 2.00% as widely expected by markets and consensus. Lagarde accentuated the positive factors of the economy such as low unemployment while downplaying the role of the inflation undershooting and strengthened euro. We maintain our call that the ECB will leave the deposit rate unchanged at 2.00% throughout both 2026 and 2027.

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Author

Danske Research Team

Danske Bank A/S

Research is part of Danske Bank Markets and operate as Danske Bank's research department. The department monitors financial markets and economic trends of relevance to Danske Bank Markets and its clients.

EUR/USD faces extra pressure, drops below 1.1800

EUR/USD trades on the defensive, slipping back below the 1.1800 support on Thursday, all in response to decent gains in the US Dollar. Earlier on Thursday, the ECB matched consensus and left its policy rates unchanged, while President Largarde delivered quite a neutral press conference.

GBP/USD falls to new lows near 1.3530

GBP/USD extends Wednesday’s pullback on Thursday, easing lower towards two week lows around the 1.3530 area. Ongoing strength in the Greenback and the dovish hold from the BoE at its earlier meeting are keeping demand for the British Pound on the defensive for now.

Gold remains offered around $4,800

Gold is back under pressure on Thursday, slipping back towards the $4,800 region per troy ounce. A firmer US Dollar is weighing on the yellow metal, even as the broader mood remains risk off. That said, falling US Treasury yields across the curve are helping to cushion the downside and, for now at least, are limiting the depth of the pullback.