Euro Rises Back Above $1 on Report of ECB Possibly Hiking by 75 BPs
2022.08.26 17:22
By Geoffrey Smith
Investing.com — The euro rose back above $1 in morning trade in New York on Friday, after Reuters reported that the European Central Bank may discuss raising its key rates by as much as 75 basis points at their next meeting in September.
The ECB had guided at the time of its last meeting only that another increase was likely to be warranted, but subsequent comments by ECB governing council members had indicated that the choice would be essentially between hikes of 25 or 50 basis points. The ECB had raised its deposit rate to 0% in July, ending eight years of negative interest rates.
By 10:00 ET, the euro was at $1.0032, lifted also by tentative signs of a weakening inflation dynamic in the U.S., where a key gauge of consumer prices – the price index for personal consumer expenditures – fell 0.1% in July, bringing the 12-month rate of inflation down from 6.8% to 6.3%. The numbers nudged market sentiment in the direction of expecting a slight relaxation in the pace of interest rate hikes by the Federal Reserve.
