The euro reached its highest level in almost two weeks on Tuesday as reports emerged that the European Central Bank would discuss raising interest rates by 25 or 50 basis points at Thursday’s meeting.
The euro hit a day high of US$1.0230, a gain of 0.7% since the beginning of the trading day. The currency, shared by 19 European countries, fell to a 20-year low near parity with the dollar last week, on fears that an energy crisis could send Europe into recession. Meanwhile, the US currency was boosted by expectations that the Federal Reserve will continue to aggressively tighten policy to combat inflation.
Early in June, the ECB confirmed that it planned to raise interest rates at its policy meeting in July by 25 basis points, the first such hike in more than 11 years, with a further increase anticipated for September.
