ECB Raises Rates by 25bps, Euro Slips as Lagarde Holds Back on Next Move
By Aboki Forex —
The euro fell against the dollar on Thursday after the European Central Bank raised its benchmark interest rate by a quarter percentage point. The move was widely expected by markets.
But the ECB stopped short of giving clear signals about further rate hikes. Traders were hoping for a stronger hint on the path ahead. Instead, ECB President Christine Lagarde kept the door open but offered no firm commitment.
The central bank also updated its economic forecasts. It raised its baseline inflation projections for 2026 and 2027. The reason: higher energy prices. At the same time, the ECB downgraded its growth forecasts for the same period.
Analysts say the mixed signals leave the euro vulnerable. The single currency slipped to $1.0850 in afternoon trading, down from $1.0880 before the decision.
For Nigerian forex traders, the development means the dollar remains strong against the euro. This could keep pressure on the naira in the parallel market as importers and businesses continue to demand dollars.