Diverging signals about monetary policy from the European Central Bank and Federal Reserve this week have set the euro on a clear path for further weakness.

The euro is slipping fast, dragged down by traders who are betting that interest rates in Europe and the US will continue to head in opposite directions. Yesterday, the European Central Bank (ECB) cut rates,

The Fed kept rates steady at 4.25%-4.50%, signalling caution amid strong US growth and elevated inflation. Meanwhile, the ECB faces pressure to cut rates further as the eurozone economy weakens. The euro fell to 1.

The Federal Reserve and the European Central Bank will announce their interest rate decisions today and tomorrow respectively. Australian CPI falls.

The ECB (European Central Bank) continued policy normalisation today, with another 25 basis points (bps) worth of cuts across all three benchmark rates. This marks the fourth consecutive rate reduction, bringing the Deposit Facility Rate, the Refinancing Rate, and the Marginal Lending Facility Rate to 2.75%, 2.90%, and 3.15%, respectively.

Market expectations for European Central Bank interest rate cuts are reasonable and risks around the inflation outlook are broadly balanced, Croatian central bank chief Boris Vujcic said on Monday.

Against this backdrop, the ECB’s communication in the policy statement and President Lagarde’s comments will hold the key to determining the scope and timing of the next rate cuts as the Bank battles concerns over economic growth and potential tariffs by United States (US) President Donald Trump’s administration.

European stock markets rose Thursday as the European Central Bank cut interest rates again while US shares were steady after a mixed bag of company earnings reports.

The European Central Bank on Thursday cut interest rates by a quarter of a percentage point, saying it expects inflation to fall back to its target later in the year and signaling that further easing is likely in coming months.

The central bank cut rates by a quarter point, as it rushes to brace a stagnant economy against President Trump’s threatened tariffs.

U.S. President Donald Trump is getting his wish that interest rates drop across the world, just not at home where a strong economy and uncertainty over his own policies have set the stage for the Federal Reserve to diverge from its central bank peers.