The ECB has increased its key interest rates by 25 basis points. Initially, there was a surge in the Euro as the market had been evenly split between expectations of a rate hike and no change. However, the Euro’s strength was short-lived, and it quickly turned into a selling spree. In the ECB staff’s outlook, the inflation forecast for 2024 was raised from 3.0% to 3.2%. However, this had been widely reported in advance, so it was not much of a surprise. What seemed to catch the market off guard was the downward revision in growth projections for the entire period from 2023 to 2025.
The Euro is currently facing strong selling pressure, but it remains uncertain how long this downward trend will persist.