In a surprise announcement European Central Bank on Thursday raised key interest rates for the first time in over a decade with the purpose of combating inflation.
The ECB raised the benchmark deposit rate by 50 basis points from minus 0.5% to 0%, lifting the bank’s deposit facility out of negative territory for the first time in eight years.
“The Governing Council judged that it is appropriate to take a larger first step on its policy rate normalisation path than signalled at its previous meeting,” the ECB statement read.
News of the rate hike buoyed the euro to a session high to trade at $1.0257.
The yield on the 10-year Italian bond also bumped on the news.
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