EUR: watch for a single word that could change everything

The European Central Bank (ECB) is set to cut interest rates by 25 basis points at its March 6 meeting, lowering the deposit rate to 2.5%. All 82 economists surveyed by Reuters expect the cut.

So, with this in the bag, the focus shifts to what comes next. Markets see a 60% chance of another cut in April, but hawkish policymakers like Isabel Schnabel are pushing back.

According to ING, a key signal will be whether the ECB drops the term “restrictive” from its stance. If it does, a pause could follow; if not, further cuts may be likely.

Overall, though, the ECB is unlikely to provide detailed forward guidance. Factors like U.S. tariffs and developments in Ukraine could significantly impact the eurozone economy, making it difficult to set a long-term policy path.