Title: Euro higher as ECB officials affirm rate hike plans, new tool
Jun 21, 2022 04:46AM ET
The euro rose on Tuesday, supported by the European Central Bank's plans to raise interest rates to curb inflation, while the yen hit a 24-year low again as the Bank of Japan's ultra-loose stance on monetary policy continued to have an impact.
The euro rose 0.5 percent to $1.0563 after ECB chief economist Philip Lane stated that the ECB will raise interest rates by 25 basis points at its July meeting, but the size of the September hike has yet to be determined, implying that a larger 50 basis point hike is possible.
The dollar gained 0.2 percent to 135.35 yen, close to a 24-year high of 135.60 yen set early last week, after the Bank of Japan on Friday dashed any hopes of a policy shift and reaffirmed its commitment to ultra-easy monetary policy.
The dollar index, which tracks the greenback against six major rivals including the euro and yen, fell 0.3 percent to 104.10 points as attention turned to Federal Reserve Chairman Jerome Powell's testimony before Congress starting Wednesday.
Two more Fed members are due to make public statements later on Tuesday, with traders watching their comments closely for clues on the trajectory of interest rates.
The Australian dollar rose 0.3 percent after Reserve Bank of Australia Governor Philip Lowe indicated that much tighter policy is on the way, though he downplayed the likelihood of a 75-basis-point rate hike.
The dollar lost 0.2 percent to 0.9651 Swiss francs, while sterling rose 0.4 percent to $1.2294 ahead of Wednesday's inflation data.
Bitcoin, the most important cryptocurrency, rose 2% to $20,978 after failing to break strongly above or below the psychologically significant $20,000 level in recent days.