The single currency blossomed in the wake of a relatively modest rate rise of 50 basis points yesterday, following the last two 75 basis point rises. However, what led to the boom in EUR were the hawkish warnings from the ECB that interest rates must continue to rise, given inflation rates still being revised higher. The deposit rate at the ECB is now 2%.
A final number for Europe’s inflation rate in November will be announced later this morning, with the year-on-year figure expected to be 10%, but core inflation, without energy and food, at 5%. Any major deviation from those levels could see volatility continue.
Also in the news, continued repercussions from the EU-Qatar bribery scandal, exposing as the New York Times puts it, “how vulnerable Brussels is to foreign influence”.
EUR/USD past year
