EUR/USD: Euro Powers Up as ECB Goes Ahead with Another Rate Cut to Lowest in Two Years

European central bank ain’t playing games — one cut after another, all while Trump blasts Powell for his tight grip on interest rates.

📈 Euro Rallies on Another Rate Cut

• The EURUSD pair climbed 0.2% to $1.1450 on Thursday after the European Central Bank delivered its eighth interest rate cut in a year, dropping its benchmark rate to 2% — the lowest level in two years.
• The move was largely expected, but the market reaction was fast and volatile as traders priced in more dovish momentum ahead of the US Federal Reserve’s own rate path decisions.
• Trading in the major currency pair turned hot even seesawing, with rapid moves reflecting real-time repricing of global rate expectations (did you get burned scalping?).

🌱 Cooling Inflation as Backdrop

• The latest inflation print in the Eurozone gave the ECB plenty of room to act — consumer price growth eased to a 7-month low of 1.9%, right back inside the bank’s 2% target zone.
• That soft inflation backdrop means ECB President Christine Lagarde has more breathing room to support economic growth with cheaper borrowing costs.
• The euro’s strength came less from surprise and more from validation — traders now expect the easing cycle to continue, but at a measured pace.

🗽 So Close, Yet So Far Apart

• While the ECB keeps trimming rates, President Trump is turning up the heat on “Too Late” Fed Chair Jerome Powell, slamming him on Truth Social for keeping interest rates “too high for too long.”
• That divergence in tone and policy is playing directly into the hands of euro bulls, especially with the US dollar showing signs of exhaustion after its recent run.
• Looking ahead, markets will be watching the Fed’s next move and Friday’s nonfarm payrolls report — a soft print could further tilt the balance in favor of euro-dollar bulls.