Last week’s trading was generally bullish for the EUR/USD currency pair, as the European Central Bank raised interest rates for the first time in 11 years, at a higher percentage than what the markets had expected. Accordingly, the euro dollar moved towards the 1.0278 resistance, and by the end of the trading of the same week, the euro dollar fell towards the 1.0130 support level and settled around the 1.0215 level in the beginning of this important week’s trading. As the markets are on track with a new hike in the US interest rate and the announcement of US economic growth and inflation figures in the Eurozone.
The European Central Bank (ECB) cited the fall in the EUR/USD exchange rate in July as a major influence on its thinking on inflation and as a driver of its decision to time the era of negative interest rates with a larger than expected increase in its key benchmarks for borrowing costs. July’s drop from above 1.04 against the dollar appeared to be among the factors that prompted the European Central Bank to favor a larger-than-expected increase that raised the commercial bank deposit rate to zero last Thursday.