The European Central Bank raised interest rates by 25 basis points today, marking its first rate increase since 2023.
The central bank appears focused on preventing energy-driven inflation from becoming more persistent across the eurozone economy.
The ECB also revised its inflation outlook higher. Inflation is now expected to average 3.0% in 2026, up from the previous forecast of 2.6%, while the 2027 forecast was lifted to 2.3% from 2.0%.
The rate increase comes as the Middle East conflict passes the 100-day mark. Earlier, U.S. President Donald Trump cancelled planned airstrikes against Iran, saying the two sides had made progress toward a settlement that could be finalized in the coming days.
For markets, the question is whether this breakthrough can reduce energy-price pressure quickly enough to change the ECB’s outlook and subsequent policy path.
For now, short-term momentum has clearly flipped bullish, but the pair is approaching resistance, so traders may be watching whether buyers can sustain the breakout or if this turns into a rejection near the highs..
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