Federal Reserve (Fed) Chairman Jerome Powell and European Central Bank (ECB) President Christine Lagarde discuss monetary policy outlook at the ECB Forum on Central Banking in Sintra.
Fed Chairman Powell comments at ECB Forum
"The labor market is still strong."
"The disinflation trend shows signs of resuming."
"Made quite a bit of progress on inflation."
"We are getting back on disinflationary path."
"We need to be more confident before reducing policy rates."
"We need to see more data like we've been seeing recently."
"Data represents significant progress."
"If the labor market unexpectedly weakens, that would also cause us to react."
"We have the ability to take our time and get this right."
"Well aware of risk of going too soon and too late."
"Risks becoming much more balanced."
"Services inflation is usually stickier."
"Wage increases are moving back down towards more sustainable levels."
"Wage increases are still above where they will wind up in equilibrium."
"The labor market is cooling off."
"Inflation may get back to 2% late next year or the following year."
ECB President Christine Lagarde comments
"We are very advanced in the disinflationary path."
"Inflation is heading in the right direction."
"We are very attentive to inflation components and services."
"We don't need to have services inflation at 2%."
US Dollar PRICE Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the British Pound.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.01% | -0.25% | -0.05% | -0.23% | -0.10% | -0.00% | 0.15% | |
| EUR | 0.01% | -0.24% | -0.03% | -0.22% | -0.09% | -0.01% | 0.18% | |
| GBP | 0.25% | 0.24% | 0.20% | 0.03% | 0.13% | 0.24% | 0.39% | |
| JPY | 0.05% | 0.03% | -0.20% | -0.19% | -0.03% | 0.03% | 0.19% | |
| CAD | 0.23% | 0.22% | -0.03% | 0.19% | 0.14% | 0.23% | 0.37% | |
| AUD | 0.10% | 0.09% | -0.13% | 0.03% | -0.14% | 0.09% | 0.24% | |
| NZD | 0.00% | 0.00% | -0.24% | -0.03% | -0.23% | -0.09% | 0.15% | |
| CHF | -0.15% | -0.18% | -0.39% | -0.19% | -0.37% | -0.24% | -0.15% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
This section below was published as a preview of Federal Reserve (Fed) Chairman Jerome Powell and European Central Bank (ECB) President Christine Lagarde's appearance at the ECB Forum on Central Banking in Sintra.
- Fed Chairman Powell and ECB President Lagarde will discuss monetary policy at the ECB Forum on Central Banking.
- Comments on monetary policy divergence between the Fed and the ECB could trigger a market reaction.
- Investors see a less than 40% probability of the Fed leaving the interest rate unchanged in September.
Jerome Powell, Chairman of the Federal Reserve System (Fed), and Christine Lagarde, European Central Bank (ECB) President, will attend a monetary policy panel at the 2024 ECB Forum on Central Banking in Sintra on Tuesday, July 2. The panel will be moderated by CNBC Anchor Sara Eisen.
Fed and ECB policy divergence
The Fed left its policy rate unchanged at the range of 5.25%-5.5% following the June policy meeting, and it’s widely expected to stand pat on policy in July. In the post-meeting press conference, Chairman Powell noted that they need to see more good data to bolster their confidence on inflation moving toward the 2% target before considering a policy pivot.
On the other hand, the ECB announced on June 6 that it lowered key rates by 25 basis points, citing improving dynamics of underlying inflation and the strength of the monetary policy transmission.
Both central banks, however, noted that they will remain data-dependent and take policy decisions on a meeting-by-meeting basis.
The latest decisions by the Fed and the ECB point to diverging monetary policy. Investors will scrutinize comments on interest rate outlook, inflation expectations and growth prospects to see whether the policy gap could widen in the near-to-medium term.
Interest rates FAQs
Interest rates are charged by financial institutions on loans to borrowers and are paid as interest to savers and depositors. They are influenced by base lending rates, which are set by central banks in response to changes in the economy. Central banks normally have a mandate to ensure price stability, which in most cases means targeting a core inflation rate of around 2%. If inflation falls below target the central bank may cut base lending rates, with a view to stimulating lending and boosting the economy. If inflation rises substantially above 2% it normally results in the central bank raising base lending rates in an attempt to lower inflation.
Higher interest rates generally help strengthen a country’s currency as they make it a more attractive place for global investors to park their money.
Higher interest rates overall weigh on the price of Gold because they increase the opportunity cost of holding Gold instead of investing in an interest-bearing asset or placing cash in the bank. If interest rates are high that usually pushes up the price of the US Dollar (USD), and since Gold is priced in Dollars, this has the effect of lowering the price of Gold.
The Fed funds rate is the overnight rate at which US banks lend to each other. It is the oft-quoted headline rate set by the Federal Reserve at its FOMC meetings. It is set as a range, for example 4.75%-5.00%, though the upper limit (in that case 5.00%) is the quoted figure. Market expectations for future Fed funds rate are tracked by the CME FedWatch tool, which shapes how many financial markets behave in anticipation of future Federal Reserve monetary policy decisions.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD remains offered and challenges 1.0800
The intense recovery in the US Dollar keeps the price action in the risk complex depressed, forcing EUR/USD to recede further and put the key support at 1.0800 to the test on Friday.
GBP/USD breaks below 1.2900 on stronger Dollar
Persistent buying pressure on the Greenback has pushed GBP/USD to multi-day lows below the 1.2900 level, as investors continue to digest the recent interest rate decisions from both the Fed and the BoE.
Gold meets support around the $3,000 mark
The combined impact of a stronger US Dollar, continued profit taking, and the effects of Quadruple Witching weighed on Gold, pulling its troy ounce price down to around the pivotal $3,000 level on Friday.
US SEC Crypto Task Force to host the first-ever roundtable on crypto asset regulation
The US Securities and Exchange Commission (SEC) Crypto Task Force will host a series of roundtables to discuss key areas of interest in regulating crypto assets. The “Spring Sprint Toward Crypto Clarity” series’ first-ever roundtable begins on Friday.
Week ahead – Flash PMIs, US and UK inflation eyed as tariff war rumbles on
US PCE inflation up next, but will consumption data matter more? UK budget and CPI in focus after hawkish BoE decision. Euro turns to flash PMIs for bounce as rally runs out of steam. Inflation numbers out of Tokyo and Australia also on the agenda.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.