The European Central Bank left its key rate at 2.65%. The decision was announced on October 29 at 16:15 MSK. The market expected exactly this, and at the previous meeting the rate was the same.
The key rate is the price of money in the eurozone economy. Interest rates on loans and deposits in banks depend on it, and therefore so does the euro exchange rate.
In total, the ECB manages three rates, and none of them changed today. For a trader, this means that the move in the euro was driven not by the figure itself, but by the words of the regulator's head half an hour later.
What exactly came out?
- Key rate - 2.65%. The forecast was 2.65%, previously also 2.65%.
- Deposit rate - 2.5%, unchanged. This is how much banks receive for the money they keep at the ECB.
- Marginal lending rate - 2.9%, unchanged. At this rate, banks borrow money from the ECB overnight.
Why did the market watch the meeting?
The decision matched the consensus. Therefore all the substance went into the wording of the accompanying text.
The ECB noted that energy prices continue to rise, and inflation remains persistent. That is, the slowdown is proceeding more slowly than the regulator would like.
At the press conference at 16:45 MSK, ECB head Christine Lagarde added the main points:
- Risks are pro-inflationary. Prices are more likely to rise faster than slower.
- Uncertainty is growing. The regulator does not undertake to promise a trajectory in advance.
- Not a word of emphasis on rate cuts. The ECB does not emphasize the likelihood of a near-term return to easing.
What does this mean for a trader?
When the figure matches the forecast, the move is driven not by the release but by the press conference. This applies to EUR/USD and other pairs with the euro.
The main thing: the volatility window here is not 16:15, but 16:45 and beyond, while the Q&A is ongoing.
You can check the timing of such speeches in advance in the economic calendar.
What happens next?
Attention shifts to the next eurozone inflation data. It is on this that whether the rhetoric remains hawkish depends.
If the slowdown in prices accelerates, talk of a rate cut will return. If not, the hawkish tone will persist, and the euro will continue to react to Lagarde's every word.
Were you holding the euro during the press conference?
A familiar story: zero reaction to the rate itself, but half an hour later a phrase about pro-inflationary risks sends the pair up a figure. This window can be traded. But first it's worth reading the fine print of the program: some prop firms explicitly prohibit holding a position during a central bank speech, while some consider it normal trading. Separately, check how the daily drawdown is calculated - by closed trades or by the intraday shadow. The next ECB meeting will come on schedule, and it's better to figure this out in advance.