The European Central Bank announced its latest monetary policy decision today at 1:15 pm BST. Just as was the case with the FOMC decision yesterday, the ECB did not surprise markets and delivered on expectations. Interest rates were hiked by 25 basis points, putting the deposit facility rate at 3.75% and main refinancing rate at 4.25%. Such a decision was widely expected and markets were more interested in what comes next - will the ECB continue hiking rates or was it the final hike? No hints on this were offered in the statement and investors will have to wait until ECB President Lagarde's press conference at 1:45 pm BST.
Statement showed that ECB still expects inflation to remain too high for too long and that the Bank will ensure rates are sufficiently restrictive. Future decision will be data-dependant and ECB Governing Council stands ready to adjust all instruments if needed. ECB also decided to change remuneration of minimum reserves to 0% but details of this change will be announced at 2:45 pm BST.
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Create account Try a demo Download mobile app Download mobile appBased on market reaction, the decision was seen as dovish - EUR moved lower while equities extended gains. EURUSD tested 1.11 mark but failed to break above while DE30 moved further above 16,400 pts mark.
EURUSD is taking a hit following in-line ECB decision. Source: xStation5
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