Analyst: Gas prices and inflation went both ways, and the interest rate hike of the European Central Bank in September was almost fixed

On 2 September, Matthew Ryan, the managing director of the Embry market strategy, stated that, at a time of escalating tension in the United States and Iraq, gas prices had continued to rise, with inflation in the euro zone rising to 3.3 per cent in August, and the ECB had almost been determined to raise interest rates in September. He noted, however, that the August data showed that signs of a sharp rise in energy prices leading to core inflation were still clearly missing. The core inflation rate fell from 2.5% in July to 2.4%, returning to the level of February before the war in Iran. “It is far from certain that, although the interest rate hike in September seems to have been almost pegged, further interest rates have since been pushed into the restricted zone.” Ryan indicates that this may limit the scope for further appreciation of the euro against the dollar, especially given that the current market has taken into account fairly radical expectations of further interest rates in the future. Kim Xian