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Euro to Pound (EUR/GBP) Exchange Rate surges to three-week high on ECB decision

The Euro soared to a three-week high against the Pound on Thursday and climbed to its highest-level of the year against the US Dollar as the European Central Bank maintained interest rates at a record low level and increased its growth forecast for the Eurozone economy.

The Euro surged after ECB President Mario Draghi said in the press conference that followed the rate decision that the Central Bank chose to leave interest rates at the record low-level of 0.25%. He also said that it will maintain its forward guidance on rates, saying that interest rates will remain on hold for an extended length of time.

Mr Draghi added at his monthly press conference which followed the rate announcement that he expects the Eurozone economy will grow by 1.2% this year. The figure was better than the 1.1% growth forecast issued by the central bank last year.

Draghi also shrugged off concerns over inflation. The recent releases of data which showed that inflation increased slightly last month eased the pressure on policy makers to take action to stave off the threat of deflation in the Eurozone. Some economists however were not convinced and are concerned that the region could follow the example of Japan by not tackling the issue soon enough.

The latest numbers “fully confirm our decision to maintain an accommodative stance for as long as necessary,” Draghi said. At the same time, he stressed that it may take almost three years for inflation to return to the ECB’s target level of below but close to 2%.

The ECB’s announcement caused investors to shrug off concerns over the still fragile situation in Ukraine. Tensions remain high in the region after the Crimean parliament voted for the area to join the Russian Federation. The interim Ukrainian government replied saying that it would not recognise such a move.

Euro (EUR) Exchange Rates

[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,US Dollar,1.3839 ,
Euro,,British Pound,0.8273 ,
Euro,,Australian Dollar,1.5259 ,
Euro,,Canadian Dollar,1.5209 ,

As of 15:15 pm GMT