European Central prepares to raise interest rates again to curb inflation

The euro rose significantly a day after German Central Bank President Joachim Nagel hinted at the possibility of announcing another interest rate hike to curb rising inflation.

The European single currency rose 1.6% against the yen and more than 1.4% against the dollar.

Last week, the European Central Bank raised eurozone interest rates by a record 0.75 percentage points and warned that inflation would remain high for a long time to come.

Observers expected the European Central Bank to raise interest rates by a large percentage in October.

The increase in the cost of lending by the European Central Bank followed the announcement by the US Federal Reserve of tightening monetary policy to counter rising consumer prices.

Source: AFP