The euro capped the week on a strong fashion as it touched a fresh four-week record high against the US dollar after talks about the possibility of lifting the interest rates have produced smoke in the market.
Lack of Support
On Friday session, the euro tacked on 0.9% gain against the greenback to close at 1.0673 per US dollar, the currency’s best settlement in more than four weeks, following the Thursday rally that sent the currency higher after Mario Draghi, the President of the European Central Bank, made slightly hawkish remarks.
But a day after, reports about a potential interest rate hike have surfaced. A reliable source who opted to remain anonymous said that some key officials of the central bank had discussed lifting the interest rates from their recent record lows before the end of the ECB’s quantitative easing program.
Unfortunately, the said discussion lack support and was brief.
Axel Merk, the president and portfolio manager at Merk Hard Currency Fund, said that he has no idea whether the reports are correct or not but showed a fundamental shift towards getting out of the current easing program.
Despite the lack of clarity and reliability of reports, it was enough to send the continental currency, the euro, to settle at the positive territory after punching in its largest daily gain since June 23, 2016.
The ECB has raised its targets for the euro zone growth and inflation rate in 2018 but decided to keep its key interest rates steady on its policy meeting last Wednesday.