As expected, the European Central Bank lowered the refinancing rate by 25 basis points. However, the central bank managed to deliver a surprise. Over the last three months, the ECB has reduced interest rates by a total of 85 basis points, while inflation has slowed to 1.7%. This was, incidentally, below the preliminary estimate of 1.8%. Against this backdrop, a pause in further monetary easing seemed logical, at the very least. Instead, Christine Lagarde announced yesterday that there would be another rate cut as soon as December of this year by an additional 25 basis points. This development was a complete surprise to investors, and the single European currency continued to lose ground.

However, the euro weakening could have been much more significant if it had not been for the U.S. macroeconomic data. Specifically, the growth rate of retail sales in the United States slowed from 2.2% to 1.7%, which, however, turned out to be slightly better than the forecast of 1.6%. On the other hand, the decline in industrial production accelerated from -0.2% to -0.6%, whereas a 0.4% growth had been expected. In other words, the U.S. data provided some support for the euro.

In any case, the dollar's overbought condition has worsened even further, and the market will clearly latch onto any minor reason to initiate at least a local correction. However, today's macroeconomic calendar is generally empty. Perhaps the media will provide a reason. The market will likely consolidate around current levels if there are no significant events.