BREAKING: EUR drops after ECB hikes rates by 25 bp!

European Central Bank announced its monetary policy decision at 1:15 pm BST today. As expected, ECB decided to slow the pace of rate hikes from 50 down to 25 basis points. Deposit rate increased from 3.00 to 3.25%. Refinancing rate increased from 3.50 to 3.75%. ECB rates have not been this high since late-2008! Statement said that future decision will ensure policy is brought to sufficiently restrictive stance. Reinvestments under APP will  decline by €15 billion per month on average until the end of June 2023 and will be discontinued in July 2023. Reinvestment under PEPP programme are expected to continued until at least the end of 2024.

EUR moved lower in initial reaction with EURUSD dropping down to 1.1060. European indices, like German DE30, traded little changed in the first minutes following the decision.

Market's attention now turns to the post-meeting press conference of ECB President Christine Lagarde that is scheduled to begin at 1:45 pm BST.

EURUSD attempted to break back below 1.1060 price zone in the aftermath of ECB decision but bulls managed to defend the area, at least for now. Source: xStation5