The European Central Bank (ECB) recently cut its key interest rate to 3.25%, the third rate cut this year, each time by 0.25 percentage points. The rate cut was in line with market expectations and showed that the ECB was responding to falling inflation and a slowing economic outlook. This was also the first time since 2011 that the ECB has cut interest rates in two consecutive meetings, showing a major shift in its monetary policy.

In a statement after the interest rate decision, the ECB Governing Council expressed confidence in the progress of falling inflation, saying it was "progressing well." Policymakers pointed out that inflation risks have weakened, mainly due to weaker-than-expected economic activity.

The eurozone's overall inflation rate fell to 1.8% in September, the first time in three years that it has fallen below the ECB's 2% target, a trend that has increased market expectations for more aggressive monetary easing.

The ECB's move is consistent with its internal dovish voices, and policymakers including President Christine Lagarde have assured the market that inflation will return to target "in a timely manner." Coupled with weak inflation data, the market has already expected more rate cuts before the end of the year. As of the morning of the 17th, the market has fully digested the possibility of two additional rate cuts.

In addition to inflation, the ECB is also facing the challenge of a deteriorating economic growth outlook in the eurozone. According to the latest forecast, the ECB lowered its economic growth forecast for 2024 from 0.9% to 0.8%, citing weak domestic demand as the main reason.

Some of the largest economies in the eurozone continue to face headwinds, with Germany's manufacturing sector under pressure and France dealing with severe fiscal austerity measures. Overall economic confidence indicators remain weak, further exacerbating the eurozone's economic growth woes.

Given the ECB's dovish stance and weak economic data, the eurozone is likely to continue to implement monetary easing policies. In particular, continued weak growth in Germany and France, as well as further declines in inflationary pressures, suggest that there is still room for rate cuts in the future. This puts the euro in a bearish outlook, and investors should be prepared for continued weakness in the euro in the short term as the market increasingly expects more easing policies to be introduced.