ECB raises interest rates

The woes of the USD continued today, as the European Central Bank (ECB) raised its benchmark interest rate by 25 basis points, to 3.5%. The move was widely anticipated by economists, who predict two additional rate hikes in the spring will bring the ECB closer to the end of its tightening cycle and leave rates at 4%. Jean-Claude Trichet, president of the Central Bank, used GDP growth to justify the rate hikes and pointed to data that indicate the EU economy will grow by 2.9% this year, and by as much as 2.7% next year. While inflation does not loom as large as it did over the summer, the ECB is still clearly vigilant, which should be a cause of concern for Dollar bulls. Marketwatch reports:

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