For a consistent increase in euro interest rates, which will be decided at its next meetings ECB the president of the bank planned purchases yesterday, Christine Lagarde, while he recalled that the bank’s goal is to stop the growth of inflation. “We will do what we have to do,” Ms. Lagarde stressed, and in response to the growing concern of markets and economists about the impact on the economy, she added that “the main goal of the bank is not to cause a recession, but to ensure stable prices. If we do not do this, the economy will suffer more.”

In recent months, the ECB has been keeping a close eye on the US Federal Reserve, which after five rate hikes this year raised dollar interest rates to 3-3.5%. Pressured by ever-accelerating inflation, which reached 9.1% in the euro area in August, the ECB launched a new and aggressive 75 basis point interest rate hike in early September, bringing the euro base rate to 0.75. %.

However, the large spread between dollar and euro interest rates is one of the factors that continues to push the dollar up. As a result, currencies around the world are under pressure, from the euro, which is currently worth $0.96, to the pound sterling and the yen. The US currency continued its upward trend yesterday, setting a new record after the White House denied rumors that the intervention was planned to weaken the US currency. Among the currencies steadily weakening against the US is the Chinese yuan, which yesterday fell to its lowest level since 2008 and the global financial crisis. The regulator, led by the People’s Bank of China, yesterday urged the country’s banks to guard the Chinese body that determines the yuan’s exchange rate.

As for the yen, which has been under stubborn pressure for weeks, yesterday it remained at the levels of 145 yen against the dollar, which at one time caused the intervention of the Bank of Japan and, according to rumors, something similar may happen again now. Financial analysts emphasize that the consistent increase in dollar interest rates reduces the yield of US bonds. This, in turn, “attracts capital inflows into the US currency,” according to Nanette Hexler Feid, chief investment officer for wealth management at Credit Suisse Group. She added that “as long as the monetary and fiscal policies of various countries do not support their currencies, we assume that the dollar will strengthen.”

Currencies around the world are under pressure, from the euro, currently worth $0.96, to the pound sterling and the yen.

At the same time, however, European bond yields are also showing strong gains, with Greek 10-year government bond yields reaching 5.05%, registering a 3.4% gain, and the spread reaching 268 basis points, the highest level since the pandemic outbreak. in March 2020. The picture is similar in the rest of the Eurozone region. Spain’s 10-year bond yield topped 3.5% yesterday, the highest level since February 2014. Portugal’s 10-year bond yield is 3.42%, the highest since April 2017, while Italy’s 10-year bond yield is up 3%. and reaches 4.91%, fixing the highest level since the debt crisis in the eurozone.