Hike rates

Euro gains as ECB set to raise rates further

LONDON, UK — The euro soared against its arch-rivals on Monday, a day after Bundesbank President Joachim Nagel signaled further interest rate hikes from the European Central Bank to fight against spiraling inflation.

The single European currency jumped 1.6% against the yen and more than 1.4% against the dollar.

The ECB last week raised euro zone interest rates by a record 0.75 percentage points and warned that inflation would remain elevated for an extended period.

On Sunday, German central bank president Nagel signaled that the ECB is likely to continue raising rates as eurozone inflation is expected to continue to climb.

Market watchers are now expecting another big rate hike from the ECB in October.

“The ECB is likely to raise rates further after the comments,” said analyst Craig Erlam of trading firm OANDA.

He added that the euro was also due to rebound from recent heavy losses, including a 20-year low against the dollar last week.

The tightening of borrowing costs by the ECB follows the lead of the US Federal Reserve with an aggressive monetary policy to combat soaring consumer prices.