FRANKFURT (dpa-AFX) – The euro rose on Wednesday and rose to almost 1.08 US dollars. By midday, the common currency was trading at $1.0795, slightly higher than in the morning. The European Central Bank (ECB) set the reference rate slightly lower at $1.0776 on Tuesday afternoon.
The euro benefited from the weaker US dollar. The demand for the world reserve currency was no longer quite as lively because the mood on the stock exchanges is improving. At the beginning of the week there was severe turbulence because the emergency takeover of the major Swiss bank Credit Suisse (Credit Suisse (CS)) by UBS was not consistently well received. Since then things have calmed down again.
Meanwhile, Bundesbank President Joachim Nagel reiterated his assessment that the European Central Bank (ECB) has not yet reached the end of its rate hike course. There is still a long way to go for the central bank, Nagel said in an interview with the British business newspaper “Financial Times” published on Wednesday. “Our fight against inflation is not over yet.”
Also ECB President Christine Lagarde underlined the determination of the central bank in the fight against high inflation. “We will ensure price stability, and reducing inflation to 2 percent in the medium term is non-negotiable,” said the Frenchwoman in Frankfurt on Wednesday. Turbulence in the banking sector can be countered with liquidity support.
The pound sterling was also able to gain ground. In addition to the weakness of the dollar, new inflation data gave a boost. To the surprise of bank economists, inflation accelerated again in February. The Bank of England decides its key interest rate this Thursday. A further increase appears to be possible.
In the course of the day, the USmonetary policy to the center. In the evening, the American Federal Reserve will announce its interest rate decision. Bank economists mostly expect a further tightening of 0.25 percentage points. A standstill cannot be ruled out due to the recent turbulence. A stronger hike, as Fed boss Jerome Powell had promised before the turmoil on the markets, is now considered unlikely./bgf/jsl/mis