FRANKFURT (dpa-AFX) – The euro continued its gains from the past trading days on Wednesday and rose above the $1.10 mark. Over the course of the night, the common currency temporarily rose to $1.1017, reaching its highest level since August. In the morning the euro was trading slightly lower again at $1.1004. The European Central Bank (ECB) last set the reference rate at $1.0949 on Tuesday afternoon.
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As in the past few days, the euro benefited from a weak dollar. In the morning, the US currency was again under selling pressure against almost all other major currencies. The market is pointing to increased speculation that the US Federal Reserve will cut interest rates next year, which is weighing on the dollar.
Recently, Fed Director Christopher Waller had become increasingly confident that the monetary policy should push inflation back to the desired target of two percent. Foreign exchange expert Ulrich Leuchtmann from Commerzbank also pointed out that Waller mentioned the possibility of interest rate cuts next year. “His comment was particularly relevant because he is widely viewed as a hawk within the Fed’s monetary policy council,” the foreign exchange expert said. The Fed director is therefore considered to be one of the group of central bankers who are more likely to advocate for a tight monetary policy./jkr/jha/