Analysis-New COVID scare sparks rate rethink in markets

Published by
Reuters

By Dhara Ranasinghe and Yoruk Bahceli LONDON (Reuters) – Risks of a new COVID hit to economic activity are clobbering expectations for rate hikes next year from the world’s major central banks, a potential setback for the dollar and other currencies where wagers had been most aggressive. Money markets no longer fully price a 25-basis-point interest rate rise by the Federal Reserve by June 2022, nor are they positioned for a full 10-bps hike from the European Central Bank by the end of 2022, as they were just a few days ago. And the chances of the Bank of England raising rates next month are se…

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