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The **European Central Bank (ECB)** is responsible for the monetary policy of the Eurozone. Their primary goal is to maintain price stability, which means keeping inflation under control. To achieve this, the ECB uses various tools, most notably adjusting interest rates. When the ECB raises interest rates, it can attract foreign investment into the Eurozone, which increases demand for the euro, thus strengthening its value. Conversely, lowering interest rates can make the euro less attractive, potentially weakening it. In addition to interest rates, the ECB also uses other tools, such as quantitative easing (QE), which involves injecting liquidity into the financial system by purchasing assets. These measures can have a significant impact on market sentiment and, consequently, on the value of the euro.
