Here is what you need to know on Friday, July 22:

Although the euro gathered strength following the European Central Bank’s (ECB) decision to hike its key rates by 50 basis points, it lost its bullish momentum early Friday amid the negative shift witnessed in risk sentiment. The US Dollar Index edges higher toward 107.00 in the European session and US stock index futures are down between 0.3% and 0.8%. S&P Global will release the flash Manufacturing and Services PMI surveys for Germany, the euro area, the UK and the US on Friday. The Canadian economic docket will feature May Retail Sales data.

In addition to the double-dose rate increase, the ECB unveiled its new anti-fragmentation tool called the Transmission Protection Instrument (TPI). The bank also abandoned forward guidance by noting that every meeting will be live and that they will assess the data when making a decision. ECB President Christine Lagarde refrained from sharing key details regarding the TPI during the press conference. Meanwhile, Italian President Sergio Mattarella has dissolved the Italian parliament, triggering a snap election on September 25.

After having advanced toward 1.0300, EUR/USD erased a portion of its daily gains and closed in positive territory near 1.0250 on Thursday. The pair trades near 1.0200 early Friday.

GBP/USD closed virtually unchanged near 1.2000 on Thursday but started to push lower toward 1.1950 on Friday. The data published by the UK’s Office for National Statistics showed earlier in the day that Retail Sales declined by 0.1% on a monthly basis in June. In 12 months to June, sales were down 5.8%, compared to the market expectation for a contraction of 5.3%.

Pressured by the sharp decline witnessed in US Treasury bond yields, USD/JPY fell to its lowest level in over a week near 137.00 but managed to reverse its course ahead of the weekend. With the benchmark 10-year US Treasury bond yield holding in positive territory following Thursday’s 5% drop, the pair rises toward 138.00. The Japanese Finance Minister, Shunichi Suzuki, said on Friday that hiking rates could knock the economy’s recovery, signalling support for the Bank of Japan’s stance to keep monetary stimulus despite a global tightening trend amid rising inflation.