Euro and bond yields lifted by ECB official saying half-point rate hike is possible

The euro rallied on Tuesday, helped by a rise in bond yields as well as comments from a European Central Bank policymaker in which he said a half percentage point interest rate hike was possible.

Klaas Knot told a Dutch television program said he favors a quarter-point rate hike, but would support a half-point increase if new data suggest inflation is broadening further or accumulating. While regarded as one of the most hawkish voices on the ECB, Knot’s was the first to broach a half-point increase.