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EUR/USD Soars Above 1.0900 on ECB Rate Hike Announcement

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The European Central Bank is leaving no stone unturned in its quest to fight off high inflation.

The 22-year high central bank raised borrowing costs by 25 basis points to 3.5% for the eighth consecutive time, with an assurance of further rate hikes.

Even though the euro zone’s economy is weak, the European Central Bank predicts that inflation will remain above its 2% target until 2025.

Despite the possibility of some more tightening by the U.S Federal Reserve, inflation in the eurozone at 6.1% is still considered unacceptably high by the ECB, which will remain on the tightening path.

EUR/USD Surges to Monthly High Above 1.0900 on ECB Rate Hike News

The Euro climbed to its strongest level in a month as the European Central Bank delivered on its anticipated 25 basis point rate hike and promised another increase in July.

Meanwhile, the US dollar fell due to a mix of conflicting economic reports, and the currency pair rose further. Experience the excitement of this latest development in the world of forex.

European Markets Take a Tumble

European markets take a tumble following the latest ECB decision. The pan-European Stoxx 600 index dropped by 0.65%, with tech stocks seeing the biggest downturn and telecoms stocks making a slight gain.

The ECB raised its benchmark policy rate by 25 basis points, with future rate decisions expected to be based on data due to uncertainty in the inflation and growth outlook.

Meanwhile, the US Federal Reserve held off on rate hikes but projected two moves before year-end, leaving their borrowing rate at 5%-5.25%.

Asia-Pacific markets performed well, led by Hong Kong, while US stock futures took a dip.

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  • Zahari Rangelov

    Zahari Rangelov is an experienced professional Forex trader and trading mentor with knowledge in technical and fundamental analysis, medium-term trading strategies, risk management and diversification. He has been involved in the foreign exchange markets since 2005, when he opened his first live account in 2007. Currently, Zahari is the Head of Sales & Business Development at TraderFactor's London branch. He provides lectures during webinars and seminars for traders on topics such as; Psychology of market participants’ moods, Investments & speculation with different financial instruments and Automated Expert Advisors & signal providers. Zahari’s success lies in his application of research-backed techniques and practices that have helped him become a successful forex trader, a mentor to many traders, and a respected authority figure within the trading community.