Foreign exchange, bonds, commodities – possible turnaround in interest rates will support the euro – economy

The common currency is rising after calls for tighter monetary policy from the ECB mount. Prices for raw materials such as oil and the industrial metal copper are rising again.

The prospect of an imminent reversal by the European Central Bank (ECB) pushed the euro higher on Thursday. The common currency temporarily rose by 0.8 percent to $ 1.0936. In the past few days, advocates of a tighter monetary policy in particular have been drumming for an imminent rate hike, said Peter Schaffrik, investment strategist at the investment bank RBC Capital Markets. In the meantime, more moderate forces also joined in the chorus.

On the other hand, European government bonds were sold. As a result, the yield on the ten-year Bund rose to 0.939 percent, just below its recent seven-year high.

On the crude oil market, failures in Libyan deliveries increased the price of Brent oil by 1.4 percent to $108.25 per barrel. “The reason for this is the ongoing blockages of oil facilities,” said Commerzbank analyst Carsten Fritsch. “That should make it more difficult for the European Union to look for alternative providers in order to be able to decide on an oil embargo against Russia.” Observers also referred to lower demand concerns. Recent measures in China to combat the corona pandemic have been scaled back somewhat. In addition, oil inventories in the United States have fallen.

Investors jumped at copper after some mining companies announced a decline in ore production. A ton of industrial metal increased in price by 1.2 percent to $ 10,345. Rising costs of fuel and other commodities are making it harder for companies to keep production running, said Saxo Bank’s Ole Hansen. “But we need increases in the coming years in order to be able to fulfill plans regarding climate protection or dependence on Russian supplies.” Copper plays an important role in the electrification of transport and industry.

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