The ECB and the euro – how monetary policy moves EUR/USD

The European Central Bank sets monetary policy for the euro area – 21 countries since Bulgaria joined on 1 January 2026. Its decisions are the single biggest domestic driver of the euro.

#The rates that matter

The ECB has three policy rates. Since its 2024 operational framework changes, the deposit facility rate is the one that steers money-market rates and the one headlines usually quote. The main refinancing rate and marginal lending facility sit above it. The euro short-term rate (€STR) – the overnight rate that many brokers use as the benchmark for euro financing charges – tracks the deposit rate closely.

#Meeting days

The Governing Council holds monetary-policy meetings about every six weeks. On those days:

• 14:15 CET – the decision is published.
• 14:45 CET – press conference by the President, followed by Q&A.
• Staff economic projections are published four times a year (March, June, September, December), which often moves markets more than the rate decision itself.

The ECB publishes its meeting calendar on ecb.europa.eu.

#How decisions move EUR/USD

Markets price expected rate moves in advance. The euro reacts to the surprise:

• a more hawkish tone than expected (higher for longer, concern about inflation) tends to support the euro;
• a more dovish tone (faster cuts, weaker growth) tends to weigh on it;
• the relative stance of the US Federal Reserve matters as much as the ECB's.

Watch euro-area inflation (HICP) flash estimates, published by Eurostat at the start of each month, and PMI surveys; they shape expectations before the meeting.

#Why it matters for your costs

Overnight financing on euro-denominated CFDs is typically €STR plus a mark-up. When the ECB changes rates, your holding costs change. FX swap rates also depend on the rate difference between the two currencies in a pair. See spreads and trading costs.

#Other European central banks

• Bank of England – decisions usually at 12:00 London time.
• Swiss National Bank – quarterly assessments; famously removed the EUR/CHF floor in January 2015.
• Riksbank, Norges Bank, Narodowy Bank Polski, Česká národní banka, Magyar Nemzeti Bank – drive SEK, NOK, PLN, CZK and HUF.
• Danmarks Nationalbank keeps the krone pegged to the euro.

Trading around central-bank decisions means wider spreads and fast moves. Many experienced traders reduce size or stay flat into the announcement.