There are rumors over the market suggesting that the European Central Bank will raise interest rates by 25 basis points. The rumors do not provide any new information regarding the market and they are consistent with what the market is anticipating. Following these hawkish rumors the euro covered its losses against the US Dollar. The single currency rose from an early session low of 1.4159 against the Dollar to 1.4195 within half an hour.
The interest rates decision which is to be announced this Friday has been one of the major talks in the market generating significant volatility. It will be very interesting to see whether an interest rate hike, considered the most possible scenario, will be associated by a significant bullish Euro movement, or if the market has already discounted this fact and hence a hike won’t generate much volatility.