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The euro fell to a three-month low on Thursday and stocks surged after the European Central Bank raised interest rates to a record high, but suggested it could be the final step in its campaign to tighten monetary policy.

The euro lost 0.6 percent against the dollar to trade at $1.0659 after ECB policymakers announced their decision to raise interest rates by a quarter of a percentage point to an all-time high of 4 percent, as agreed by the majority of the Investors expected.

The pan-European Stoxx Europe 600 index ended the day up 1.6 percent, led by energy and mining stocks, which benefited from higher commodity prices. The French CAC rose 1.4 percent and the German DAX rose 1 percent. On Wall Street, the S&P 500 and the technology-focused Nasdaq Composite were each up 0.7 percent midway through Thursday’s trading session.

In its statement released alongside its decision, the ECB said that interest rates “have reached a level that, if maintained for a sufficiently long period of time, will make a significant contribution to the timely return of inflation to target.”

Francesco Pesole, forex strategist at ING, said the wording “essentially suggests that the ECB may have reached the peak of the tightening cycle.”

“Markets are giving some weight to the dovish suggestions for now, even considering that data flows in the Eurozone have been pretty bleak lately,” Pesole added.

The ECB’s policy decision comes amid growing investor concerns about a looming economic downturn after the European Commission recently cut its growth forecast for the 27-nation bloc to 0.8 percent this year and 1.4 percent in 2024 has.

“Given the weaker growth environment, the ECB may likely take a pause at the next meeting, and if the growth outlook deteriorates further, a pause could turn into a peak,” said Mike Bell, strategist at JPMorgan Asset Management.

To counteract high inflation, the ECB has increased borrowing costs in ten consecutive monetary policy meetings since July 2022. Annual price increases have since slowed to 5.3 percent as of August, and there is still a long way to go before inflation reaches the central bank’s 2 percent target.

Concerns have grown among investors and policymakers over ongoing price pressures in recent days as oil prices rose to a 10-month high following the extension of supply cuts by some of the world’s largest oil producers.

Brent crude, the international benchmark, rose 1.7 percent to $93.40 a barrel on Thursday and the U.S. equivalent West Texas Intermediate rose 1.6 percent to $89.93.

Stocks more sensitive to oil and other commodity prices extended gains in Europe on Thursday, with the Stoxx Europe 600 energy index rising 2.5 percent while the Stoxx Europe 600 basic materials index rose 4.3 percent. The resource-intensive FTSE 100 in London rose 2 percent.

In Asia, Hong Kong’s Hang Seng index rose 0.2 percent, while China’s CSI 300 fell 0.1 percent. Japan’s Topix rose 1.1 percent and South Korea’s Kospi gained 1.5 percent.

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