ECB Balancing Act Sees Euro Return To 2024 Lows Against The Pound
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The European Central Bank (ECB) faces a challenging balancing act in 2024. They must keep policy restrictive to prevent inflation, but are under pressure to cut rates to stimulate the slowing EU economy. The Euro is drifting lower due to poor economic data, suggesting cuts may be needed soon. The US dollar has been strong, but has faded slightly. The Euro has stayed weak, with EURGBP near 2024 lows. ECB board member Isabel Schnabel warned about persistent inflation and the need to contain second-round effects. The EU economy has been stagnant, with Germany in particular facing weakness. The ECB's restrictive rate policy is partly responsible for the weak data. Pressure may mount for the ECB to ease rates when inflation is under control.
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