Euro strengthened by ECB rate hike bets

Euro strengthened by ECB rate hike bets

The past couple of weeks have seen the Euro broadly strengthen after the European Central Bank (ECB) signalled plans for an imminent interest rate hike.

During this time, we’ve seen GBP/EUR retreat from €1.18 to €1.16.  EUR/GBP climbed from £0.84 to £0.85.

Meanwhile, GBP/USD fluctuated between $1.24 and $1.26.  EUR/USD jumped from $1.05 to $1.07.

Staying on top of the latest currency news can help you time your transfers more effectively.  Find out what you should be looking out for over the next couple of weeks…

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What’s been happening?

The euro attracted some notable support through the second half of May.  This after the ECB signalled it will raise interest rates in July and September.

The perceived narrowing in policy divergence between the ECB and Federal Reserve weakened the US dollar over the past couple of weeks.  This was particularly amid speculation the Fed may pause its current tightening cycle after the summer.

Meanwhile, the pound has fluctuated amid worrying UK economic data, political uncertainty and the announcement of Chancellor Rishi Sunak’s £15bn cost of living support package.

What do you need to look out for? 

Looking ahead, the next couple of weeks will see the ECB, Fed and Bank of England all deliver their latest interest rate decisions.

The BoE and Fed are both expected to continue raising rates which could help to underpin the pound and US dollar. The ECB meanwhile could boost the euro if it sheds some light on its plans for a July rate hike.

Elsewhere we are likely to see the war in Ukraine continue to infuse some volatility into the currency market.

At Currencies Direct we are here to talk currency whenever you need us, so get in touch if you want to know more about the latest news or how it could impact your currency transfers.

Since 1996 we’ve helped more than 325,000 customers with their currency transfers, just pop into your local Currencies Direct branch or give us a call to find out more.

1 thought on “Euro strengthened by ECB rate hike bets”

  1. Thanks for your article. As a Brit I’m really struggling with the poor performance of the pound and hoping it picks up after Brexit is ironed out

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