(BFM Bourse) – The single currency gains more than 1.4% against the greenback, benefiting from new comments from leaders of the European Central Bank auguring sharp rate hikes.
The eurozone currency is regaining strength. 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. in Paris), the euro jumped against the greenback by 1.33% to 1.0175 dollars, a highest for three and a half weeks, and against the Japanese currency by 1.52% to 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 currency brokerage Oanda.
He believes that a technical “corrective element” is also playing in the strong rebound of the European currency, which has fallen to a 20-year low 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 risk of recession which is becoming clearer.
“The step taken on Thursday” by the European Central Bank to raise its key rate by 0.75 percentage points “was a significant signal”, declared Joachim Nagel, who considers it “possible” that Germany slips into recession from 2022.
The euro is also benefiting from the return of risk appetite 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. Data for August for the Consumer Price Index (CPI) will be released on Tuesday.
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