The euro rose against rivals on Monday, a day after Germany’s central bank chief Joachim Nagel raised the possibility of the European Central Bank announcing another rate hike to curb rising inflation.
The European currency gained 1.6 percent against the yen and more than 1.4 percent against the dollar.
The European Central Bank last week raised interest rates in the euro zone by 0.75 percent and warned that inflation would remain high for a long time.
On Sunday, Nagel paved the way for the possibility that the European Central Bank will continue to raise rates amid persistently high inflation.
Observers now expect the European Central Bank to raise interest rates by a wide margin in October.
The European Central Bank is expected to raise interest rates again after these comments, said Craig Erlam, an analyst at Oanda Financial Services.
He added: Expectations point to the improvement of the euro after the heavy losses of the past days, including last week’s decline to the lowest level against the dollar in the last 20 years.
The increase in borrowing costs by the European Central Bank follows the announcement by the US Federal Reserve that it will tighten monetary policies to deal with rising consumer prices.
Source: Lebanon Debate
