Eurozone raise interest rates, as Bank of England holds on

The European Central Bank has today raised interest rates in the single currency zone, for the first time since July 2008, to 1.25%. The Bank of England in its own meeting today, has kept UK interest rates on hold at 0.5%.

The ECB’s move was generally expected, and had been ‘priced in’ in advance to give a stronger (more expensive) Euro over the last couple of weeks. ECB President Trichet will now give a press conference explaining the move, while we will have to wait 2 weeks to discover how close the Bank of England came to raising UK rates today too.

Interest rates are a key driver of exchange rates, so to discuss the implications on your own transaction, contact us at Currency Index.