Dhe exchange rate of the euro increased significantly on Monday. At midday, the shared currency was trading at $1.0497. This is the highest level since June. Later, the price was slightly lower again. In the morning, the euro was still below the $1.04 mark. the European Central Bank (ECB) had set the reference rate at $1.0375 on Friday afternoon.
Statements from the ECB gave the euro a boost. “In Europe we have to prepare for a longer period in which the monetary authorities have to concentrate on restoring price stability,” Dutch central bank governor Klaas Knot said in Paris on Monday. At this point in time, it is “more of a joke” to say that monetary policy has been tightened excessively. However, Knot is considered a monetary policy “hawk”. When in doubt, he advocates a tightening of monetary policy. The financial market players are still at odds as to whether the ECB will raise interest rates by 0.50 percentage points in December or by another 0.75 percentage points.
The dollar was still gaining in early trading. The unrest in China had driven investors into the American US currency, which is considered safe. The largest demonstrations in decades have taken place in China in recent days. The people’s displeasure is directed against the strict measures of the Chinese zero-Covid policy such as repeated lockdowns, mass tests and forced quarantine.