ECB’s Villeroy: Central bank to probably cut interest rates on October 17

Dhwani Mehta FXStreet

European Central Bank (ECB) Governing Council member and Bank of France President, François Villeroy de Galhau, said in an interview with La Repubblica on Monday that the ECB will probably cut interest rates on October 17.

Key quotes

"In the last two years, our main risk was to overshoot our 2% target.”

"Now we must also pay attention to the opposite risk, of undershooting our objective due to a weak growth and a restrictive monetary policy for too long."

"If we are next year sustainably at 2% inflation, and with still a sluggish growth outlook in Europe, there won't be any reason for our monetary policy to remain restrictive, and our rates to be above the neutral rate of interest.”

"The victory against inflation is in sight, but it’s not a reason to become complacent and relax on a preset course.”

Market reaction

EUR/USD is off the highs following mixed Eurozone Retail Sales data, currently trading 0.13% lower on the day at 1.0961.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

GBP/USD rebounds above 1.3300 ahead of UK Retail Sales data

The GBP/USD pair recovers some lost ground to near 1.3325, snapping the five-day losing streak during the Asian trading hours on Friday. However, the potential upside might be limited amid heightened military tensions in the Middle East. Traders brace for the release of the UK Retail Sales data, which will be published later on Friday.

EUR/USD rises as US Dollar weakens despite rising Middle East tensions

EUR/USD gains ground after posting modest losses in the previous day, trading around 1.1380 during the Asian hours on Friday. However, the potential upside for the pair could be limited as the US Dollar may regain strength, largely driven by escalating conflicts in the Middle East that threaten to push crude oil prices higher.

Gold extends slide as inflation fears lift Fed hike bets amid Trump's tariffs

Gold attracts sellers for the second straight day, and weakens further below the $4,050 level during the Asian session. Escalating US-Iran tensions remain supportive of elevated crude oil prices, fueling inflation fears and bolstering expectations of higher-for-longer US interest rates. This helps the US Dollar to preserve its strong weekly gains to a nearly one-month high, and turns out to be a key factor undermining the non-yielding bullion.

Ethereum: Derivatives interest in ETH improves, but signs of caution remain

Ethereum is hovering slightly below the $1,900 level, down 3% on Thursday following a slight expansion in derivatives interest. The top altcoin's open interest has increased to 14.60 million ETH, marking a 600K ETH increase over the past two days and its highest level since June 7.

Crypto Market Overview: Bitcoin tests 50-day EMA support – Pi Network and Sky lead losses

The broader cryptocurrency market faces headwinds with rising tensions between the US and Iran, pushing Bitcoin down to its 50-day Exponential Moving Average support around $65,135 on Friday. Under pressure, Pi Network and Sky emerge as the worst-performing crypto assets over the last 24 hours.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.