LONDON—The euro rose on Tuesday, drawing support from the European Central Bank’s plans to raise interest rates to contain inflation, while the yen retested a 24-year low as the Bank of Japan’s ultra-loose monetary policy stance continued to weigh.
The euro was 0.5 percent firmer at $1.0563 after ECB Chief Economist Philip Lane said the ECB will raise interest rates by 25 basis points at its July meeting, but the size of its September hike is still to be decided, suggesting a larger 50 basis point hike could be on the cards.
Meanwhile, ECB policymaker Francois Villeroy de Galhau said the central bank’s planned instrument against financial fragmentation must allow it to back up its commitment to defend the euro….