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Gradual pace of ECB rate cuts help to support stronger EUR

• ECB lowers policy rate for second time by 25bps to 3.50%.
• Lower policy rate reflects more confidence inflation will fall towards target.
• While back-to-back cuts can’t be ruled out in October, it is more likely the ECB will wait until December to cut again.
• We expect EUR/USD to settle to within higher range between 1.100 and 1.1500 heading into year end.