EUR dips as the ECB raises by 25 basis points
Friday 5 May, 2023
Daily Currency UpdateThe euro dipped yesterday, giving back some of its recent gains against the US dollar after the ECB relaxed the pace of its interest rate increases following the Federal Reserve signalled it was done with its tightening programme.
The European Central Bank only raised by 25-basis-points, the smallest since it started lifting them last summer.
Key MoversThe next big question for FX markets will be: how long will rates remain at these levels?
The Fed has guided markets away from the possibility of rate cuts this year, though markets are pricing them in, nonetheless.
Money markets are now pricing around a 15% chance the Fed will begin cutting rates in June and expect roughly 80 basis points of rate cuts through the year's end.
- GBP/USD: 1.2575 - 1.2655 ▲
- GBP/EUR: 1.1385 - 1.1465 ▲
- EUR/USD: 1.1005 - 1.1085 ▲