Euro on track for record streak of weekly losses after ECB surprises
2023-09-15 07:42AM UTC

Euro rose in European trade on Friday against a basket of major rivals following heavy losses yesterday and away from recent six-month lows against US dollar.


The euro is on track for a fresh weekly loss, the longest such streak of weekly losses in history after surprise decisions by the European Central Bank this week. 


EUR/USD rose 0.25% to 1.0667, with a session-low at 1.0733, after losing 0.8% yesterday, the second loss in a row, and the heftiest such loss since July 27, plumbing a six-month low at 1.0632 amid a heavy sell-off. 


Weekly Trades 


The euro is down 0.4% against US dollar on track for the ninth weekly loss in a row, which could be the longest ever such a streak in euro's history.




Unexpectedly, the European Central Bank raised interest rates for the tenth meeting in a row, carrying on its battle against inflation.


The ECB raised interest rates by 25 basis points to 4.50%, the highest since 2001.


The ECB said at its policy press release that despite slowing inflation, it'll remain high for an extended duration.



The central bank asserted that upcoming decisions will rely heavily on data to decide the appropriate level and duration of high interest rates.




ECB President Christine Lagarde said that ECB members believes the current rates will help control inflation and bring it back to 2%.


The ECB will continue to rely on data to determine the duration of the currently high interest rates.


The ECB cut growth forecasts this year from 0.9% to 0.7%, but expects the euro zone economy to rebound in the second half of the year.


Interest Rate Gap


The US-European interest rate currently stands at 100 basis points, the lowest since May 2022, and expected to remain so until November 2023 at least.


There's a chance however the Fed will raise interest rates by 25 basis points in November, widening the gap once more. 

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