The euro surged today after the European Central Bank left interest rates unchanged and voiced optimism about future economic developments in the eurozone.
The ECB maintained rates unchanged, including the benchmark minimum bid rate which stayed at 0.5 percent. The central bank said:
Recent developments in economic sentiment survey data have shown some improvement from low levels.
The bank also noted:
Progress has been made since last summer in improving the funding situation of banks, in strengthening the domestic deposit base in stressed countries and in reducing reliance on the Eurosystem as reflected in repayments of the three-year LTROs.
At the same time, “projection for 2013 has been revised marginally downwards” despite the positive developments. All in all, the outlook was fairly positive, even considering the negative revision, helping the euro to rally.
The ECB announcement followed the Bank of England decision to keep monetary policy stable too.
EUR/USD jumped from 1.3090 to 1.3157 as of 13:43 GMT today and the daily high of 1.3165 was strongest since May 9. EUR/JPY advanced from 129.62 to 130.27. EUR/GBP ticked up from 0.8496 to 0.8504, erasing the earlier drop to 0.8478.
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