Euro retreats after ECB decides to keep interest rates unchanged – Markets in a minute

Euribor rises at three and six months and remains at 12 months at a 16-month low

The Euribor rate rose today at three and six months and remained at a 12-month low since March 28, 2023.

With today’s changes, the Euribor remained at very similar values, but the three-month rate, which rose to 3.688%, remained above the six-month rate (3.624%) and the 12-month rate (3.504%).

The six-month Euribor rate, which in January became the most widely used in Portugal for variable-rate housing loans and which was above 4% between September 14 and December 1, rose today to 3.624%, up 0.004 points, after reaching 4.143% on October 18, a high since November 2008.

Data from the Bank of Portugal (BdP) for May indicate that the six-month Euribor is the most widely used, representing 37.5% of the stock of loans for permanent homeownership with variable rates. The same data indicate that the 12-month and three-month Euribor represented 33.8% and 25.2%, respectively.

In the 12-month period, the Euribor rate, which was above 4% between June 16 and November 29, remained today at 3.503%, the same value as Wednesday and a minimum since March 28, 2023, against the maximum since November 2008, of 4.228%, recorded on September 29.

The three-month Euribor rose to 3.688%, up 0.010 points, after rising to 4.002% on October 19, a high since November 2008.

The ECB’s monetary policy meeting is taking place today, with investors anticipating that rates will remain unchanged and that they will be cut again in September.

The ECB cut its key interest rates by 25 basis points on June 6, after having kept them at the highest level since 2001 in five meetings and having made 10 increases since July 21, 2022.

A reduction in key rates should lead to a moderate decline in Euribor rates and thus reduce mortgage repayments.

Analysts expect Euribor rates to reach around 3% by the end of the year.

The Euribor average in June fell at three, six and 12 months, more sharply than in May and in the shorter terms.

The Euribor average in June fell 0.088 points to 3.725% at three months (against 3.813% in May), 0.072 points to 3.715% at six months (against 3.787%) and 0.031 points to 3.650% at 12 months (against 3.681%).

Euribor is set by the average of the rates at which a group of 19 eurozone banks are willing to lend money to each other on the interbank market.