Ogra proposes an increase in fuel prices to Rs 120 per litre

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April 14, 2022: The euro plunged to a two-year low against the US dollar on Thursday as comments from European Central Bank President Christine Lagarde were seen as a sign that the bank was in no rush to cut interest rates increase.

The European single currency fell to $1.0758 EUR=EBS, its lowest level since April 2020. It last fell 1.1% to $1.0775.

Lagarde said there was no clear timetable for when rates would start to rise, adding that it could be weeks or even months after the stimulus ends.

“We’ll deal with interest rates when we get there,” she added.

Earlier, the ECB concluded its last meeting with cautious steps to ease support and avoid a hard schedule. It confirmed its plans to reduce bond purchases, commonly known as quantitative easing, this quarter, then end them sometime in the third quarter.

Against the pound sterling, the euro fell to its one-month low, last falling 0.4% to 82.85 pence EURGBP

Lagarde’s comments were “all the same language as the March meeting, except this time there was no aggressive surprise in the form of a policy adjustment,” said Ima Sammani, FX market analyst at Monex Europe.

“Frankly, given the uncertain circumstances at the moment, Lagarde’s caution may be warranted, but it’s fair to say that after the eventful March meeting, markets were expecting a little more sprinkle.”

In late morning trading, the dollar =USD index, which measures the greenback against six competitors, rose 0.8% to 100.57, having previously reached 100.76, its highest since April 2020.

The dollar extended its gains after data showed US retail sales picked up in March, boosted mainly by higher gasoline and food prices.

The battered yen JPY=EBS had some rest and recovered slightly from a 20-year low against the dollar. It was last flat on the day at 125.80 yen.

According to a Reuters poll, more than three-quarters of Japanese companies say the yen has fallen to the point of damaging their business.

Other central banks tightened monetary policy, bolstering expectations of higher interest rates worldwide.

The Bank of Korea surprised markets with a rate hike, while the Monetary Authority of Singapore also tightened policy, pushing the Singapore dollar SGD= to its highest point since February.

On Wednesday, the Bank of Canada and the Reserve Bank of New Zealand both raised interest rates by 50 basis points, the largest increase for each in about 20 years. CAD/+10.2789


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