By the afternoon, the common currency, the euro, was able to make up for some of the significant losses at the start of the week. It traded at $1.0283, slightly higher than the morning. The European Central Bank (ECB) set the reference rate at 1.0274 (Monday: 1.0246) dollars. The dollar thus cost 0.9733 (0.9760) euros.
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Market observers spoke of a counter-reaction after the weak start to the week. On Monday, indications of declining price dynamics in Germany caused the euro exchange rate to drop by around one cent. With the producer prices, the prices that manufacturers charge for their goods rose much more slowly than expected. This prompted market speculation that the ECB would be less aggressive in future rate hikes to combat high inflation.
However, current statements from the ranks of the ECB give reason to expect that the central bank will continue to provide consistent guidance in curbing high inflation. According to Bundesbank President and ECB Council member Joachim Nagel, inflation in the euro area has probably not yet peaked. In addition, the German inflation rate should remain high in the coming year.
In addition, the Austrian ECB Council member Robert Holzmann spoke on Tuesday for another strong rate hike by 0.75 percentage points in December. In doing so, the ECB would send a signal to the public that it is serious about curbing high inflation, said the governor of the Oesterreichische Nationalbank.
For other important currencies, the ECB set the reference rates for one euro at 0.86358 (0.86793) British pounds, 145.20 (145.33) Japanese yen and 0.9791 (0.9817) Swiss francs. An ounce of gold was trading at $1,744 in London this afternoon. That was about $6 more than the day before.
FRANKFURT (dpa-AFX)
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