- British Pound Falls Against Dollar as House Prices Drop Most Since 1991 (Bloomberg)
- Nordic Currencies: Iceland’s Krona Declines Against Dollar on Downgrades (Bloomberg)
- Taiwan’s Dollar Falls as Demand for Funding in the U.S. Currency Increases (Bloomberg)
If most of us remain ignorant of ourselves, it is because self-knowledge is painful and we prefer the pleasures of illusion.”
After pumping tens of billions of euros and dollars into its financial system over just the last two weeks, the ECB couldn’t muster up enough energy to cut rates today. The ECB left their benchmark lending rate sitting at 4.25% after they concluded their policy meeting this morning.
In light of major risks of bank failures rising to the surface in Europe, a handful of investment banks took the opportunity to make their predictions yesterday. Those predictions: the ECB will cut rates before the end of the year.
But if you’re banking on a rate cut to further weigh down the euro, you may not have to wait for the ECB to officially lower interest rates – the situation in Europe (though the ECB’s monetary policy has not yet capitulated) will likely be pressuring the euro through year-end. The market is pricing it in already.
A weekly chart of the euro: