The euro was lower on Thursday against the dollar, after the European Central Bank eased the pace of interest rate hikes a day after the Federal Reserve signaled a possible pause in its tightening program.
The euro was down 0.35% at $1.10260, after trading nearly flat before the decision. The ECB slowed the pace of rate hikes on Thursday with a 25 basis point increase in its three policy rates, the lowest since it started raising them last summer.
The bank did not explicitly commit to further increases and kept its options open for future moves as it continues to fight stubbornly high inflation in the euro zone.
“The ECB has been relatively dovish, the tone is a bit more dovish and more focused on the past effects of tightening and the fact that they are being passed through strongly to the euro zone economy,” said Sebastian Vismara of BNY Mellon Investment Management.
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The euro’s moves reversed some of Wednesday’s 0.57% gain, after the Federal Reserve raised its benchmark overnight rate by a quarter of a percentage point, as expected, but removed from its statement of monetary policy that “anticipates” that further rate hikes will be necessary.
Sterling was stable at $1.2566, after touching $1.2595, its highest since June 2022. The Swiss franc hit $0.88215, its highest level since January 2021, before falling back.
Cautionary sentiment kept the yen – a traditional haven in times of market turbulence – well supported, at 134.7 against the dollar. The greenback fell 1.4% against its Japanese peer on the eve.
Source: Ambito
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