European central bank takes action against inflation: raises interest rates to 3.75%

Oil market reacts to federal reserve's interest rate hike plans

By Laila Eid | @Laila Eid | 3 July 2023

  • The US dollar index rose during today's trading until the issuance of this report by 0.30%

  • Gold is settling above $2,000 an ounce

  • West Texas Intermediate crude settled near the level of $67 a barrel

European central bank raises interest rates amid inflation concerns

In a move similar to the US Federal Reserve, the European Central Bank Raises Interest Rates to 3.75% The European Central Bank has raised the European interest rate by approximately 25 basis points to 3.75%, the highest level since 2008.

At a press conference today, Christine Lagarde indicated that the bank does not see itself stopping its monetary tightening policy anytime soon. On the other hand, the general budget indicates that this policy is making progress.

Lagarde also pointed out that food price is suffering more from inflation, and that we have already seen it declining, but we must be cautious about inflation because many factors affect it directly, such as climate change and the war in Ukraine. If the Federal Reserve stops raising interest rates, the European Central Bank will keep make independent decisions based on the factors and variables that affect the euro and inflation, taking into account the factors and variables that will affect the euro and inflation.

The US economy has indirect effects on the world, given its size. However, regardless of what the Federal Reserve decides, the European Central Bank will focus on its economy, as Lagarde says, "We are not relying on the Federal Reserve.

Volatility in West Texas Crude as market optimism over Fed's interest rate hike eases

After three consecutive negative sessions, we witnessed volatility in the movements of West Texas crude oil, which fell during today's trading to $64 per ounce, the lowest since December 2021, before rebounding positively, but still below $70 per barrel.

This was due to market optimism about the Federal Reserve stopping its interest rate hike this year, easing tension over demand for crude oil. It is worth mentioning that West Texas crude has declined by about 15% since the beginning of this year, and the plan of the Organization of the Petroleum Exporting Countries (OPEC) to reduce production by more than one million barrels has been implemented since the beginning of May.