Investors will be watching the euro Thursday after the European Central Bank raised interest rates as widely expected.
The euro has powered to a 15-month high, taking related exchange traded funds (ETFs) such as CurrencyShares Euro Trust (NYSEArca: FXE) along for the ride as markets positioned for a rate increase from the ECB, which boosted its key rate by a quarter-point to 1.25% on Thursday.
The euro’s rise has further impaired the U.S. dollar. [Euro’s Record Quarter Boosts Currency ETFs.]
The ECB’s interest-rate decision is ratcheting up speculation in the euro. In the U.S., meanwhile, the government standstill looms while Republicans and Democrats are in a stalemate over the budget.
The ECB made its first hike in nearly three years on Thursday as it frets about inflation.