Stocks, euro fall as ECB prepares to raise interest rates

U.S. and European shares slid and eurozone borrowing costs hit an eight-year high on Thursday after the European Central Bank signaled it would hike interest rates next month for the first time since 2011, a move some said was too slow.

Euro falls against the dollar after the European Central Bank says inflation will remain “undesirably elevated” for some time. Investors now expect the Federal Reserve to hike rates by 50 basis points next week.
Bond yields across southern Europe rose sharply after the ECB flagged a string of rate hikes would ensue.
With euro zone inflation at a record-high 8.1%, the ECB had already flagged a series of moves.
MSCI’s broadest index of Asia-Pacific shares outside Japan lost 0.5%, with Australian shares finishing down 1.4%.
The Japanese yen dropped to a 20-year low against the dollar of 134.56 before paring some losses.

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