The prospect of a further significant increase in key interest rates in Europe caused exchange rate gains for the euro on Tuesday. The common currency rose 0.2 percent to $ 1.0019. Both the US Federal Reserve and the ECB are apparently willing to accept a recession in the fight against inflation. Supporters of a restrictive monetary policy course could feel confirmed by the German inflation data. Inflation rose to 7.9 percent in August compared to the same period last year. “At 7.9 percent, inflation in August just missed a new 70-year high,” said Jörg Kramer, chief economist at Commerzbank. “But the gas surcharge and the end of the tank discount and nine-euro ticket are likely to drive inflation to ten percent by the end of the year.” He therefore advocates an ECB interest rate hike of 0.75 percentage points in the coming week.
At the same time, some commodity investors cashed in. The European natural gas price fell at times by eleven percent to 242 euros per megawatt hour and was thus 20 percent below its record high on Friday. The sales were triggered not only by the surprisingly high filling levels of the gas storage facilities in Germany, but also by reports that the federal government might agree to a gas price cap. The analysts at Energy-Scan, the data provider of the utility Engie, wrote that investors who are speculatively oriented in particular would now exit the market so as not to have to sell at a loss after the price limit was introduced. After the rally at the start of the week, oil prices eased again. North Sea Brent crude fell 5.4 percent to $99.44 a barrel. Investors fear that more aggressive rate hikes by central banks could lead to a global economic slowdown and hurt fuel demand.