Euro Extends Gain as ECB Charts a Path for End of Negative Rates
- Spread between two-year German and US bonds is narrowing
- Euro rises on signs negative rates will end by third quarter
Christine Lagarde during the World Economic Forum in Davos, Switzerland, on May 24.
Photographer: Jason Alden/BloombergThis article is for subscribers only.
The euro extended a rebound from a five-year low as the European Central Bank made it clear that it sees the end of negative monetary policy.
That will help narrow the interest-rate differential with the Federal Reserve, which has moved more quickly to raise rates and keep inflation under control. The spread between two-year German and US bond yields shrank to 217 basis points, its narrowest since early March.