Euro Climbs, Bonds Fall as 4% ECB Rate Comes Into View
- Officials lifted rate by a quarter point as expected to 3.50%
- Money markets imply almost 80% chance of 4% ECB rate
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The euro gained more than 1% and regional government bonds slumped as traders increased bets the European Central Bank will raise interest rates after officials hiked and signaled more to come.
The common currency jumped to as high as $1.095, the strongest level since mid-May. The yield on two-year German bonds rose, approaching the highest level in a decade, touched earlier this year.