European Banks should be enthusiastic about this news because the Euro is bullish. Euro bulls might have to curb their enthusiasm after the rush to buy the single currency, which may have left it vulnerable in the short term.

In other particulars, it provides uncertainty about global rate plans. The Euro is currently hitting its highest in 10 months against the US dollar. Euro has gained 13% from late September's 20-year low.

And the prospect of a milder recession is falling energy prices, and are now facing plentiful supplies of natural gas and some European assets. However, enthusiasm for the value of the Euro relates to the short-term prospects of the Euro Central Bank.

It is stated that the Euro is set for a second straight week of declines and is around $1,075. Until now, there is still much that needs to be prepared by Euro investors.

"I'm still positive on the Euro, but if I look at our positioning data, it shows that current longs on the Euro. What we call "current over helt" piston is also achieved a record high," said BNY Mellon EMEA Strategist Geoffrey Yu.

Euro Bulls Get a Reality Check, Investors Begin Assess Rate Outlook. But What's Behind It?

The common currency bathed in 2022, falling below the parity level with the US Dollar. Thus, the Euro has bounced back, offering relief in the region's fight against inflation. The Euro also recouped much of its losses against the US Dollar.

Currently, the Euro owes $1.07, up about 13% from September last year when it sank from a 20-year low. The resurgence of the common currency used by 20 countries in Europe.

In addition, energy prices easing recession fears In the eurozone and at the European Central Bank (ECB). The Euro's rebound has also been aided by a dollar weakening. 

The US Federal Reserve slows its pace of monetary tightening in response to cooling inflation. Furthermore, close economic ties bore the brunt of the energy crisis, and the economic uncertainty quickly spread there.

"There was a feeling in the market that there was no alternative, especially to the dollar. So this can make the dollar strong again," said Andreas Konig, head of global currency management at Amundi Asset Management.

Meanwhile, the Euro suffered because of the ECB's initial reluctance to raise interest rates. Euro bulls might have to curb their enthusiasm after the rush to buy the single currency. The prospect of a milder recession thanks to falling energy prices.

"as long as gas prices were an important driver for the Euro. Then higher or lower interest rates didn't matter. lower gas prices are allowing markets to look at interest rate differentials between Europe and the US," said Francesco Pesole, currency strategist at ING.

European Markets Close 1.4% Higher, ECB Raises Rates by 50 bps for Euro Price Increase

The European Central Bank on Thursday confirmed expectations of a 50 basis point interest rate increase, bringing its key rate to 2.5%. In a statement, it pledged to "say the course in raising interest rates significantly at a steady pace.

The government should roll back support on energy prices. European Central Bank president also repeatedly uses the phrase Staying the course. And this relates to the upcoming rate decision, in which many doubt the bank will stay in a hawkish stance for much longer. 

Meanwhile, the ECB entered tightening last year mode. Furthermore, European markets closed 1.4% higher as the Central Bank hiked interest rates. 

European market closed higher Thursday as investors digested interest rate hikes by ECB. And this is predicted to affect Euro and USD trading because of all these movements.

Seeing all the movements experienced by the Euro, it's no wonder that many predict that the ECB will carry out a continued static policy. Currency is now a particular concern. And because of that, investors started to do a new analysis.