The euro fell against most major currencies on Thursday after the ECB held rates and Christine Lagarde announced an early departure. Strong US data barely moved the dollar or Treasury yields. EUR/GBP broke lower, while EUR/USD and EUR/CHF have yet to confirm a broader breakdown.
The euro fell against most major currencies on Thursday as the European Central Bank held its policy rate and Lagarde announced she would leave early. Eurozone bond yields declined at the same time.
ECB hold and Lagarde exit weigh on the euro
The ECB kept its deposit rate unchanged at 2.50%, noting that a larger and more prolonged energy shock could push inflation higher while weakening growth. Markets had entered the meeting pricing approximately 76% probability of a December rate hike, so the statement carried a relatively dovish interpretation.
Lagarde will step down on February 7, 2027, approximately nine months ahead of schedule. Berenberg economist Holger Schmieding suggested the timing could reduce uncertainty around the appointment while Emmanuel Macron remains president, though the source describes this as his interpretation rather than an established motive.
EUR/GBP broke last week's 0.8360 low, the clearest confirmed downside break. EUR/USD briefly slipped below 1.1111, and EUR/CHF remained above 0.9193 support. Because Lagarde's departure was announced before the rate decision, the contributions of leadership uncertainty and policy expectations cannot be separated precisely.
US data fail to move the dollar
Third-quarter GDP growth accelerated from 2.2% to 3.4% annualized, beating expectations. September headline PCE inflation rose from 3.4% to 3.6% y/y.
Yet the details were softer. September real consumer spending was virtually unchanged and real disposable income fell 0.3%.
Market pricing was already tilted toward a Fed rate hike. CME FedWatch indicated approximately 83% probability of a December increase, compared with around 85% a day earlier. The US 2-year yield stayed around 4.687%, and the Dollar Index was modestly higher, around 102.30.
Tech sell-off stays in equities
Nasdaq-100 futures fell approximately 1.3%, with concerns focused on the scale of AI-related capital expenditure. Treasury yields stayed broadly steady, and gold weakened by approximately 1%.
Source: ActionForex
Trading involves risk.
Risk Disclaimer
