Euro surges as ECB seen hiking interest rates further

Euro surges as ECB seen hiking interest rates further. The euro soared against big rivals Monday, a day after Bundesbank president Joachim Nagel signalled more interest rates hikes from the European Central Bank to fight sky-high inflation.

The European single currency rocketed 1.6 percent versus the yen and by more than 1.4 percent against the dollar.

The ECB last week hiked eurozone interest rates by a record 0.75 percentage points, and warned inflation would remain elevated for an extended period.

On Sunday, German central bank president Nagel signalled the ECB would probably continue raising rates with eurozone inflation set to keep on climbing.

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Market watchers now expect another big ECB rate hike in October.

“The ECB is expected to raise rates more after the comments,” said analyst Craig Erlam at trading firm OANDA.

He added that the euro had also been due a rebound following recent heavy losses, including a 20-year low against the dollar last week.

The ECB’s tightening of borrowing costs follows the US Federal Reserve’s lead with aggressive monetary policy to tackle sky-high consumer prices.

The euro (symbol: €; code: EUR) is the official currency of 19 out of the 27 member states of the European Union (EU).

This group of states is known as the eurozone or, officially, the euro area, and includes about 340 million citizens as of 2019.

The euro is divided into 100 cents.

The currency is also used officially by the institutions of the European Union, by four European microstates that are not EU members, the British Overseas Territory of Akrotiri and Dhekelia, as well as unilaterally by Montenegro and Kosovo.

Outside Europe, a number of special territories of EU members also use the euro as their currency. Additionally, over 200 million people worldwide use currencies pegged to the euro.