ECB Raises Rates, Euro Slides 0.15%

[ECB Raises Rates, Euro Slides 0.15%]

The European Central Bank increased its policy interest rate on Thursday, marking the first hike in almost three years, to contain inflation as higher energy costs from the Iran conflict threaten to spread across the euro‑zone economy. Following the announcement, the euro fell 0.15 % against the U.S. dollar, trading at $1.1518. The U.S. dollar remained near a two‑month high, supported by heightened geopolitical uncertainty. U.S. President Donald Trump stated that the United States would strike Iran “very hard tonight” and indicated a future target on Kharg Island, Iran’s oil infrastructure hub, after a series of retaliatory strikes that have weakened the cease‑fire. Markets showed limited reaction to both the ECB decision and the renewed Gulf tensions, which market strategist Joel Kruger of LMAX Group described as not providing a “meaningful surprise.” The article notes that the dollar typically gains during periods of geopolitical tension as investors seek safe‑haven assets, while it weakens when peace expectations rise. This report was generated with AI assistance and edited by Reuters staff.