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The euro firmed as investors' expectations grew that the ECB would raise interest rates in the next meeting, turning the focus on the eurozone prospects and away from the US. The Fed had earlier this week increased the borrowing costs by 0.25%. However, analysts feel that the Fed may be close to calling a halt on interest rate increases.
This may mean that the interest rate differential between the euro and the greenback would start to narrow during this year. This is expected to boost the euro.
The sterling firmed against the dollar but still held close to seven-month lows against the stronger euro.
This commentary is correct as at close of business day Thursday and is provided by Financial Markets of Bank of Valletta.
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