The euro rose on Tuesday after Reuters reported that European Central Bank policymakers may raise interest rates by 25 or 50 basis points at their meeting on Thursday to try to curb record inflation.
The euro’s gains, which lifted it from levels close to parity with the dollar last week, weakened the greenback as expectations for a sharp 100 basis point rate hike by the Federal Reserve later this month weakened.
The euro rose 1.1 percent on the day to hit a high of $1.0254, its strongest level since July 6, with market expectations rising 60 percent for a 50-point gain on Thursday. 25% on Monday.
The dollar index fell 0.8 percent to 106.64, down from yesterday’s low of 106.88 but off last week’s high of 109.29, a level not seen since September 2002.
The Australian dollar rose 1.2 percent to $0.6894 after the Reserve Bank of Australia’s policymakers said they saw the need for further tightening.
The yen rose ahead of the Bank of Japan’s expected policy decision on Thursday, but was not far from a 24-year low despite the central bank’s repeated pledges in recent days to continue aggressive easing.
The pound rose 0.6 percent to $1.2017, nearing a one-week high hit on Monday at $1.2032, before falling to $1.1761 on Thursday for the first time since March 2020, as Britain grappled with fierce and divisive competition. There is a debate over who will replace Prime Minister Boris Johnson.
Source: Lebanon Debate
