It was a big day for the euro yesterday after the European Central Bank’s latest interest decision caused the single currency to jump across the board.
The ECB announced that it would be raising interest rates in the eurozone by 50 basis points, the first rate hike in over a decade. The euro climbed by almost 1% against the pound and the dollar in the immediate aftermath and also gained against many other major currencies.
The ECB also revealed that it had created a mechanism – called the Transmission Protection Instrument (TPI) – to ensure the eurozone remained cohesive should stresses develop in certain debt-laden countries from these higher interest rates. However, the euro’s strength was short-lived due to a lack of details surrounding the TPI mechanism which left investors disappointed.
Today, PMI figures for the eurozone, Germany and France will be released along with the monthly German Bundesbank report.
