The euro soared against the dollar and the yen after comments by the head of the German central bank anticipating new “significant” rate hikes in the euro zone to counter inflation.
Around 8:05 a.m. GMT (10:05 a.m. Paris), the euro jumped against the greenback by 1.33% 1.0175 dollars, a highest for three and a half weeks, and against the Japanese currency by 1.52% 145.25 yen. The ECB should raise its rates more according to the comments of the last days of members of the ECB, underlines Craig Erlam, analyst of the platform of brokerage of currencies Oanda.
He believes that an element of technical correction also plays in the strong rebound of the European currency, fell to the lowest for 20 years in recent weeks. The president of the German central bank prepared the ground on Sunday for new significant interest rate hikes in the euro zone in the face of soaring inflation despite the looming risk of recession.
The step taken by the European Central Bank on Thursday to raise its key rate by 0.75 percentage points was a significant signal, said Joachim Nagel, who considers it possible that Germany will slip into recession from 2022.
The euro has also benefited from the return of the appetite for risk which has weighed on the greenback, a safe haven, for several sessions.
Part of this optimism could be explained by the hope of a second consecutive month of lower inflation in the United States, comments Ipek Ozkardeskaya, analyst at SwissQuote.
US inflation reached its highest level in 40 years in June before slowing to 8.5% in July. August data for the Consumer Price Index (CPI) will be released on Tuesday.
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08:05 GMT 21:00 GMT
EUR/USD 1.0175 1.0042
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EUR/JPY 145.25143.06
EUR/CHF 0.9554 0.9614
EUR/GBP 0.8706 0.8629
USD/JPY 142.75143.06
USD/CHF 0.9554 0.9654
GBP/USD 1.1688 1.1589
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