We are getting closer to the monetary policy meeting of the European Central Bank and the markets are reacting. The euro gained against the dollar in the middle of the week. The currencies of some Central and Eastern European countries also strengthened.
The European Central Bank will meet on Thursday to decide whether to change the direction of its current monetary policy. While just a few weeks ago there were opinions, even among some members of the ECB’s management, that monetary policy could or should be tightened, the outbreak of war in Ukraine may put these considerations on the back burner.
However, financial markets “priced in” the upcoming ECB meeting in the form of a strengthening euro. The single European currency appreciated by 1.15 percent against the US dollar and by 0.85 percent against the major currency basket. The euro thus strengthened to its highest level in 22 months. The British pound also gained slightly against the dollar.
However, alongside the euro, the currencies of some Eastern European countries also strengthened. The Polish zloty and the Hungarian forint rebounded from their multi-month lows against the euro and the dollar. The zloty is stronger by more than six percent against the dollar, while the forint has strengthened by 3.62 percent.
