When Jean-Claude Trichet, President of the European Central Bank (ECB), hinted several weeks ago that the ECB was poised to raise interest rates, the Euro immediately jumped almost 2%. Today, however, Trichet sang a different tune, insisting a hike in interest rates was not indeed imminent. The announcement clearly came as a shock to economists and investors, many of whom had predicted the ECB would raise rates for the first time in two years, on the basis of Trichet’s earlier comments. According to the ECB, interest rates are at an appropriate level, whereby inflation is contained without constraining economic growth. Bloomberg News reports:

“Trichet was expected to be quite hawkish, so the euro is being sold on disappointment with the more dovish comments…The market will now be looking for signs that the rate hike [will happen in] December.”

Read More: Euro Drops as Trichet Damps Speculation About Rate Increases