The euro bounced back on Monday morning as traders continued to mull the European Central Bank's decision to raise its key interest rates last week. The European currency moved higher against the sterling, yen, aussie and franc and was little-changed against the U.S. and Canadian dollars.
The European currency dropped away from recently-visited highs against the dollar, sterling and others following the ECB's decision on Thursday. At a session held in Frankfurt, the ECB's governing council raised the key-lending rate by 25 basis points to 4.25%. President Jean-Claude Trichet said the ECB can be counted on to deliver price stability but refused to commit to future rate hikes in his comments accompanying the central bank's decision to raise rates for the first time in about a year.
The euro rebounded away from a weekly low against the sterling. The European currency climbed as high as 0.7963 before easing back to 0.7950. According to a report released by the Office for National Statistics, or ONS, manufacturing production in May dropped 0.8% on a yearly basis, while economists had expected a mere 0.1% decrease.
The European currency was range-bound with the greenback, holding most of its losses from last week. The pair moved at 1.5656 in the mid-morning. There was no major economic news planned from the U.S. on Monday.
The European currency also turned higher against the yen and moved to 168.37 in the mid-morning. The euro climbed to 1.6157 against the franc and 1.6421 against the aussie. The European currency was little-changed at 1.5964 against the loonie.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.