The value of the euro has recorded a downtrend against the trading price of the dollar in the latest trading session.
It was the Thursday trading session when the trading price of the dollar experienced a downtrend against the dollar.
ECB Increased Interest Rates
The euro experienced a dip as the European Central Bank announced that they were increasing the interest rates.
As per the ECB officials, the interest rates have been increased by 50 bps. The surge has been exactly what most traders and economists had expected the ECB may implement.
On the other hand, the value of the sterling has also recorded a downtrend against the dollar. It happened as the Bank of England commented on the inflation.
They reportedly adopted a tone pertaining to inflation, stating that it may rise in the future.
Prediction by the ECB
The European Central Bank (ECB) officials have predicted that they may not lower the interest rates in near future. Instead, they may continue holding the same stance against the rising inflation rates.
The central bank has stated that they may not tone down on increasing the interest rates even in the next month. They may continue hiking the interest rates in the next month as well.
They will hike the interest rates the same way they have increased them in the running month. The central bank of Europe has no intentions of making changes to the monetary policy.
They will monitor the economy in the upcoming months and then make the necessary changes in the monetary policy.
As of now, they have no plans of making changes to the monetary policy and it is subject to change based on the economic situation.
The announcement by the BoE
The Bank of England has also made an announcement pertaining to interest rate hikes. They have announced that they will be increasing the interest rates by 50 bps.
However, they have made one thing clear for economists and traders. As per the central bank of England, they do not intend to increase the interest rates anymore.
Previously, they had pledged that they will continue hiking the interest rates to deal with rising inflation. However, they have changed their decision and will no longer pursue the same monetary policy.
Instead, they will not increase the interest rates forcefully anymore. They will let the market and economy be the key drivers behind the interest rate hikes.
According to the Bank of England officials, the inflation rates have already reached their peak. This means that the inflation rates will not surge from the particular level anymore.
The outcome of the ECB and the BoE
Economists have stated that the European Central Bank has not fallen fully in line with the expectations that were set.
The traders are not happy about the situation and that is the reason why the value of the euro has recorded a decline.
As for the Bank of England, the country has changed its policy against the rising inflation rates. This is the reason why a reduction has been witnessed in the trading price of the dollar.
The decline for the dollar has slowed down following the decision made by the Bank of England.
Performance of the Euro and Sterling against the Dollar
Following recent developments, the value of the euro has dipped by 0.70% against the euro. On the other hand, the value of the sterling has declined by 1.09% against the greenback.
The value of the sterling is down to $1.2240 against the trading price of the dollar. This is the lowest level the trading price of the sterling has hit against the dollar since January 17.
As for the dollar, the US dollar index has recorded a 0.74% surge against the six major currencies. The DXY now stands at 101.71 against the major currencies.