The euro leaped higher against its peers yesterday after a Reuters article confirmed that the European Central Bank may opt for a 0.50% rate rise at Thursday’s announcement, instead of the widely expected 0.25%. The EURUSD pair surged above the $1.02 handle and made good progress towards the $1.03 figure. This move pushed GBPEUR lower by the tune of almost 0.50%, down to the low €1.17s.
Whilst many participants are still very sceptical about the potential for such a large increase, especially with it only publicised 48 hours before the official announcement, it still cannot be ruled out. Inflation remains stubbornly persistent around the globe and pressure has risen on the major central banks to finally take the action needed to reduce the pace of price rises back to long-term targeted levels.
Written by Viv Savani. 8:08am, July 20th 2022
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