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.

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