Markets: Euro rallies
Mihir Kapadia – CEO and Founder of Sun Global Investments, writes on the latest.
The Euro rallied on Monday on month-end portfolio adjustments and expectations for a more hawkish European Central Bank. A flash estimate of Euro zone inflation showed that consumer price rises in July were level with the previous month, standing stable at 1.3 per cent and in line with forecasts.
The Czech Republic may kick off Europe’s monetary-tightening cycle this week, jumping ahead of its peers after three years of stimulus fuelled price growth that is sputtered on the rest of the continent. Economists are almost evenly split, saying the Czech National Bank would raise its benchmark to 0.25 per cent at its 3 August meeting from a record-low 0.05 per cent - the rest predicted no change. If there is a hike, it will be the first in more than nine years, and it would boost the appeal of koruna assets as other rate setters stay put and the European Central Bank holds off on announcing curbs to its quantitative-easing programme until fall.”