The euro rose 0.4% against the dollar on Wednesday to $1.0575 after European Central Bank President Christine Lagarde laid out a timetable for the first interest rate hike in the bloc in a decade. In a speech, Lagarde said net purchases via the asset purchase program will likely conclude in the third quarter of 2022. The first rate hike will occur sometime after the end of that, she said. “We have not yet precisely defined the notion of ‘some time’, but I have been very clear that this could mean a period of only a few weeks. After the first rate hike, the normalization process will be gradual.” The euro has lost 7% against the dollar so far this year on the view that the Federal Reserve will be more aggressive with interest rate hikes, while Europe’s economy is constrained in part by fallout from Russia’s war in Ukraine. The Stoxx Europe 600 index rose 1.2% to 425.35, while the yield on the 10-year bund fell 4 basis points to 0.96%.
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