Euro rises, focus on rate hike bets
Dollar takes a breather after recent gains
Swiss Franc at multiweek highs after SNB hawkish turn

May 19 Reuters The euro rose on Thursday as investors priced in the chance of an aggressive nearterm tightening path by the European Central Bank, while the safehaven dollar took a breather after significant gains in the previous sessions.

Money markets are currently pricing in around 105 basis points bps of ECB rate hikes from around 95 bps on Tuesday before ECB official Klaas Knot signalled a 50basispoint rate increase was possible in July.

U.S. money markets, meanwhile, are still discounting around 200 bps of Fed rate hikes by December 2022.

Risk appetite in the currency market is fragile as stocks slid, tracking Wall Street39;s worst day since mid2020, as warnings from some of the world39;s biggest retailers underscored just how hard inflation is biting. 

However, some analysts have positive views about the global economy and risk currencies on expectations for an easing of restrictions in China.

More Shanghai residents were given the freedom to shop for groceries for the first time in nearly two months on Thursday as authorities set out more plans for exiting the citywide COVID19 lockdown more fully. 

We are relatively bullish on risk currencies against the U.S. dollar, including both the euro and sterling, as we think market concerns over global growth are excessive, said Matthew Ryan, senior market analyst at Ebury.

We…