Euro Volatility Ahead as ECB Rate Decision Looms

The euro (EUR) experienced some gains yesterday due to its inverse relationship with the weaker US dollar (USD), but its movements were tempered by anticipation of the European Central Bank's (ECB) interest rate decision, which is set for today.

A 25-basis-point rate hike has already been priced in, so investors will be focusing on the ECB's forward guidance. If the central bank adopts a more dovish tone than expected, it could put pressure on the euro.

The pound (GBP) remained volatile due to a lack of domestic data, which allowed it to trade within a broad range but left it vulnerable to shifts in wider market conditions.