The euro recorded its biggest rise against the dollar in 6 months during trading on Monday, while the European Central Bank stressed the need for further interest rate hikes in Europe.
The European currency rose as European Central Bank officials stressed the need for further interest rate hikes in Europe amid expectations of a slowdown in US inflation, which reduces demand for the US currency.
And Bloomberg news agency reported that the euro rose 1.6 percent today to $1.0198 per euro, the biggest gain for the single currency since March last year, underpinned by tough statements from eurozone monetary policy makers such as as Joachim Nagel, president of the German Central Bank, said the central European Union would raise interest rates again if current high inflation rates persisted.
As Claes Knott, member of the Board of Governors of the European Central Bank, said earlier this week, “Inflation has crossed the inflection point, which has affected consumption and investment opportunities and disrupted budget planning.”
“In response, the European Central Bank agreed to raise interest rates to calm the business community and control inflationary expectations,” he added in his speech at the Euro V economic conference, according to the Bloomberg news agency.
“We will continue to do this until the inflation forecast stabilizes at 2% in the medium term,” he stressed.
The European Central Bank raised interest rates last week by 75 basis points, the biggest European interest rate hike in more than two decades to curb inflation in the 19 European Union’s single European currency area.
Source: agencies