Euro above two-decade low ahead of ECB decision

Today, Thursday, the euro hovered above its 20-year low, which it hit two days ago, as investors await the European Central Bank’s policy decision and comments from the head of the Federal Reserve (the US Central Bank) for indications on the path of global monetary tightening.

The European Central Bank is expected to raise interest rates by 75 basis points, making the deposit rate above zero for the first time since 2012, but the option of raising interest rates by 50 basis points has not been ruled out.

“We expect the European Central Bank to raise (interest) only 50 basis points today, instead of the consensus view of 75,” said Chris Turner, head of markets at ING.

“If this is the case, we believe that the euro against the dollar may correct its decline to about $ 0.99,” he added.

By 0747 GMT, the euro was trading down 0.3 percent at $0.99795, consolidating above the lowest level since late 2002 at $0.9864, as the energy crisis in Europe keeps the single currency under pressure, while the dollar is strengthening with the Federal Reserve repeating its commitment reducing inflation to the target rate

US Central Bank President Jerome Powell is scheduled to participate in a discussion at 1310 GMT while European Central Bank President Christine Lagarde will hold a news conference after the decision.

In general, the statements of Federal Reserve officials have remained hawkish recently

The dollar index, which measures its performance against six major currencies, rose 0.1% to 109.82 points, after hitting a peak at 110.79 on Wednesday, a level not seen since June 2002.

The British pound fell 0.4% to $1.1486, heading again towards the 37-year low recorded the previous day at $1.1407, before the new British Prime Minister Liz Terrace announced her plans to deal with rising energy bills.

The Japanese yen was little changed on Thursday, and it traded at 143.77 to the dollar, after hitting a 24-year low of 144.99 in the previous session.

Meanwhile, the Australian dollar fell 0.5% to $0.67345, and earlier recorded $0.6713.