©Reuters. The euro depreciates after inflation expectations in the US
Frankfurt (Germany), Aug 12 (.).- The euro depreciated this Friday after long-term inflation expectations in the US rose in August, once again encouraging bets on aggressive increases in interest rates.
The euro was trading around 3pm GMT at $1.0255, versus $1.0340 in late European forex trading the previous day.
The European Central Bank (ECB) set the reference exchange rate for the euro at 1.0285 dollars.
Long-term inflation expectations in the US have risen to 3% in August (2.9% in July), according to data from the University of Michigan.
The dollar appreciated after the publication of these data, which once again encouraged expectations that the Federal Reserve (Fed) will raise its interest rates by 75 basis points in September to control the rise in prices.
The drop in inflation in the US in July reduced these forecasts on Wednesday and Thursday and therefore the euro rose on those days.
Federal Reserve Bank of San Francisco President Mary Daly told Bloomberg she is open to raising interest rates by 75 basis points in September.
These statements contributed to the appreciation of the dollar against the euro and other currencies.
Markets are currently pricing in a 60% chance that the Fed will raise interest rates by 50 basis points in September.
The single currency was traded in a trading band between $1.0253 and $1.0324.