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Lockdowns and surge in infections sink market bets on 2022 rate rise

Optimistic growth forecasts for the coming months in doubt as Covid restrictions return across eurozone

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Christine Lagarde, president of the European Central Bank. Photo: Peter Juelich/Bloomberg

Christine Lagarde, president of the European Central Bank. Photo: Peter Juelich/Bloomberg

Christine Lagarde, president of the European Central Bank. Photo: Peter Juelich/Bloomberg

The euro weakened sharply on Friday as financial market investors who had bet the European Central Bank will be forced to lift interest rates in 2022 reversed course, spooked by a new wave of Covid restrictions from Austria to Ireland.

New restrictions have mostly stopped short of a return to full lockdowns, but the speed of the changing public health guidance cast significant doubts over optimistic growth forecasts for the coming three months.


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