Hi All, Saw the interest rate increase rate rise for the EUR 08/09/22 and as a relative novice didn’t expect it to spiral downward, I had assumed that an increase in interest rates would send the market BULLISH, Can anyone explain the move? Much appreciated. WHG,
I found it difficult to believe that what the ECB do would be effective. They are noted for doing as little as possible as late as possible. Whatever they do fails to convince the market. I reckon they would only have reversed the EUR’s slide against the USD with a 5.0% rate increase: only that would have convinced the market they were serious about beating inflation. But let’s face it, that was never going to happen, and never will.
I therefore elected to stay in my EUR/USD short across the announcement.
But I would not have opened a short just before the announcement based on the likely market reaction.
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