At times, the course of the European common currency had climbed to 1.0198 US dollars. In the afternoon, the euro was trading slightly lower at $1.0134. In the morning, the euro was still below $1.01. The European Central Bank (ECB) set the reference rate at 1.0155 (Friday: 1.0049) dollars. The dollar thus cost 0.9847 (0.9951) euros.
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The euro received tailwind from the prospect of further strong interest rate hikes by the ECB. Bundesbank boss Joachim Nagel called on Sunday not to be deterred by the gloomy economic outlook in the fight against inflation. Because stable prices are more important for growth, the euro area would have to survive a dry spell if necessary, according to the ECB Governing Council member.
On the other hand, investors are betting that falling inflation in the USA could prompt the US Federal Reserve to take less restrictive interest rate hikes. US consumer prices for August will be released on Tuesday.
The euro had previously benefited from the tighter monetary policy the ECB benefits. Last week, the monetary watchdogs raised the key interest rate sharply by 0.75 percentage points in order to counteract the very high inflation. The ECB is thus following other large central banks such as the US Federal Reserve or the Bank of England, which raised their interest rates much earlier than the ECB.
For other important currencies, the ECB set the reference rates for one euro at 0.86778 (0.86860) British pounds, 144.49 (143.30) Japanese yen and 0.9667 (0.9657) Swiss francs. A troy ounce of gold was trading at $1,727 in London this afternoon. That was a good eleven dollars more than on Friday.
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FRANKFURT (dpa-AFX)
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