ECB Hikes Rates by 25bps to 2.50%, Euro Fails to Gain Expected Rate Differential Benefit

English summary

The ECB raised its deposit facility rate by 25 basis points to 2.50% and upgraded inflation forecasts. Despite the hike, EUR/USD did not strengthen as expected because the move was largely priced in and US policy rates remain higher than those in the Eurozone, with energy shocks adding growth risks.