The EUR/USD and Cable (GBP/USD) headed north today, Thursday on interest rate hike that took many by surprise after the European Central Bank and Bank of England both raised interest rates by 0.25 percentage. This was a move to tighten up control on inflation.
The Bank of England surprised the markets with a quarter-point rate hike, taking interest rates to 4.75 percent to slowdown accelerated growth. The Euro zone to 3.0 percent also.
In sharp contrast, the U.S. Federal Reserve is nearing the end of its tightening cycle and this have been weighing on the dollar.
In the ECB’s statement after rates rise the bank President Jean-Claude Trichet he said “.. monetary policy in the euro zone is still accommodative and that further rate increases will be needed if the bank’s economic assumptions are confirmed. “
These factors created a buoyant mood in the forex market today that blew the roof off within ten ~ fifteen minutes of the news. If you were on the right side, great gain with limited work.
Happy Trading
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