The pound fell by almost 1% against the euro yesterday following the European Central Bank’s latest interest rate decision but has made a good recovery this morning. Against the dollar, sterling is up around 1% compared to this time last week.
The ECB raised interest rates by 50 basis points, a greater hike than the 25 basis points that markets had been expecting until earlier this week when an anonymous press briefing suggested a more aggressive hike was on the cards.
This was the ECB’s first rate hike in more than a decade and sent the euro higher in the immediate aftermath. Nonetheless, the single currency’s strength was short-lived after markets were left disappointed by the lack of details in the ECB’s plan to aid debt-laden countries, such as Italy, with higher interest rates.
Today, we will see PMI figures for the UK, eurozone and US which could cause some market movements.
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