Not only the US Federal Reserve but the European Central Bank, the Bank of England and the Swiss National Bank raised their base interest rate on Thursday.“Hike” occurred as expected, up by half a percentage point.
Euro started to get stronger
The European single currency was weakening just before the European Central Bank’s base interest rate was announced. It lost around 0.6 percent against the dollar. But as soon as the ECB published a monetary policy decision in the form of raising the base interest rate by half a percentage point, the euro began to erase its previous losses.
The FED also raised base interest rates
The increase in the ECB’s base interest rate came in line with both market and analysts’ expectations. Nevertheless, the European Central Bank was not the only institution to raise its base interest rate in previous days. The hike in the form of half a percentage point was already released by the US Federal Reserve on Wednesday, which aims to reduce inflation.
The Bank of England, which raised its base rate by half a percentage point on Thursday, similar to the Swiss National Bank, also played a part. Since all major central banks have raised their base rates, it is hardly to be expected that this would affect financial markets immediately.
