The euro strengthened against both the pound and the dollar yesterday after the European Central Bank’s monetary policy meeting.
The ECB left the interest rate the same, as expected, and repeated its stance that rates will only be hiked when inflation is comfortably above 2%. However, President Christine Lagarde’s testimony following this was more ‘hawkish’ causing the euro to strengthen.
Lagarde didn’t rule out hiking rates this year, opening the door to the possibility of a rate hike for the first time. She said, “Compared with our expectations in December, risks to the inflation outlook are tilted to the upside, particularly in the near term”, and added that “the situation has indeed changed.”
