EURUSD Rallies Hard on Fed Pause, ECB Rate Hike

The Federal Reserve rate hike pause has led to a huge one-day surge in the EURUSD.

eurusd-daily-chart-rallies

EURUSD– Daily Chart

The EURUSD has resistance at the 1.1033 level, and it should head there in the coming days after a big one-day move on Thursday.

ECB Announces Final Rate Hike

The European Central Bank (ECB) announced what many think will be a final rate hike with a move to 3.5%. That finally closed the gap on the U.S. Federal Reserve, which paused rate hikes at the 5% level on Wednesday.

ECB policymakers have now raised rates at each of their last eight meetings, with the first coming in July 2022. The central bank was forced to abandon its negative rate policy to combat a surge in inflation.

Inflation in the eurozone peaked around 11% last year and has been steadily declining. Prices rose 6.1% over the previous year to May, lower than the 7% figure in April. Core inflation is still an issue in the eurozone and may lead to further rate hikes from the ECB.

“Inflation has been coming down but is projected to remain too high for too long,” the central bank said.

Before the Thursday announcement, analysts expected the 25 basis point increase to be the bank’s last, although many now see the potential for more.

“President Lagarde all but promised another hike next month. Our baseline forecast remains that interest rates will peak in July and stay there until the middle of next year but the chances of another hike at the following meeting in September have risen,” said Jack Allen-Reynolds, deputy chief economist at Capital Economics.

Growth forecasts for the eurozone were lowered to 0.9% this year and 1.5% next year. The eurozone has fallen into a winter recession last year, according to revised figures. Furth interest rates could pressure economies, with Germany entering a recession and low sentiment indicators for Europe’s new “problem child”.

For now, the market is focusing on the Fed pause and the ECB rate hike, and the EURUSD looks to be heading higher.

Recent News
Start Trading Now !

Try our demo account for free to learn trading. When you’re ready, switch to a live account and start trading for real.

Popular posts

ATFX

The Firm has taken the decision to cease providing services to retail clients, with immediate effect. We are therefore unable to accept any applications.

Services to professional clients will not be impacted. For professional applications please contact [email protected]

ATFX

使用限制

本网站的产品及服务不适合英国居民。网站内部的信息和素材不应被视为分销,要约,买入或卖出任何投资产品。请继续访问 https://www.atfx.com/en-za/

ATFX

使用限制

本网站的产品及服务不适合英国居民。网站内部的信息和素材不应被视为分销,要约,买入或卖出任何投资产品。请继续访问 https://atfxgm.eu/en/

ATFX

使用限制

本网站的产品及服务不适合英国居民。网站内部的信息和素材不应被视为分销,要约,买入或卖出任何投资产品。请继续访问 https://www.atfx.com/en/

ATFX

使用限制

本网站的产品及服务不适合英国居民。网站内部的信息和素材不应被视为分销,要约,买入或卖出任何投资产品。请继续访问 https://www.atfx.com/ar/

ATFX

Restrictions on Use

Products and Services on this website are not suitable for the UK residents. Such information and materials should not be regarded as or constitute a distribution, an offer, or a solicitation to buy or sell any investments. Please visit https://www.atfx.com/ar/ to proceed.
ATFX

Restrictions on Use

Products and Services on this website are not suitable for the UK residents. Such information and materials should not be regarded as or constitute a distribution, an offer, or a solicitation to buy or sell any investments. Please visit https://www.atfx.com/en/ to proceed.

ATFX

Restrictions on Use

Products and Services on this website are not suitable for the UK residents. Such information and materials should not be regarded as or constitute a distribution, an offer, or a solicitation to buy or sell any investments. Please visit https://atfxgm.eu/en/ to proceed.

ATFX

Restrictions on Use

Products and Services on this website are not suitable for the UK residents. Such information and materials should not be regarded as or constitute a distribution, an offer, or a solicitation to buy or sell any investments. Please visit https://www.atfx.com/en-au/ to proceed.

ATFX

Restrictions on Use

Products and Services on this website are not suitable for the UK residents. Such information and materials should not be regarded as or constitute a distribution, an offer, or a solicitation to buy or sell any investments. Please visit https://www.atfx.com/ar/ to proceed.
ATFX

Restrictions on Use

Products and Services on this website are not suitable for the UK residents. Such information and materials should not be regarded as or constitute a distribution, an offer, or a solicitation to buy or sell any investments. Please visit https://www.atfx.com/en/ to proceed.

ATFX

Restrictions on Use

Products and Services on this website are not suitable for the UK residents. Such information and materials should not be regarded as or constitute a distribution, an offer, or a solicitation to buy or sell any investments. Please visit https://www.atfx.com/en-za/ to proceed.
ATFX

Restrictions on Use

Products and Services on this website are not suitable for Hong Kong residents. Such information and materials should not be regarded as or constitute a distribution, an offer, solicitation to buy or sell any investments.

使用限制: 本網站的產品及服務不適合香港居民使用。網站內部的信息和素材不應被視為分銷,要約,買入或賣出任何投資產品。

ATFX

Restrictions on Use

Products and Services on this website are not suitable for the UK residents. Such information and materials should not be regarded as or constitute a distribution, an offer, or a solicitation to buy or sell any investments. Please visit https://atfxgm.eu/en/ to proceed.

ATFX

Restrictions on Use

AT Global Markets (UK) Limited does not offer trading services to retail clients.
If you are a professional client, please visit https://www.atfxconnect.com/