Euro hits new two-year high against dollar

AFP
Friday, April 13, 2007

The euro rose to 1.3534 dollars on Friday in early European trading, reaching the highest level since January 3, 2005 on expectations of rising eurozone interest rates.
The single currency later stood at 1.3523 dollars, compared with 1.3480 dollars late on Thursday.

The euro had breached 1.35 dollars on Thursday after the European Central Bank (ECB) signalled that it was ready to raise eurozone borrowing costs again in June.

ECB President Jean-Claude Trichet sent a clear signal that the bank was set to raise its key interest rates -- already at a five-and-a-half-year high -- still further in June, after holding rates at 3.75 percent on Thursday.

"The dollar has been depressed against the euro by the comments of President Trichet yesterday following the monetary policy meeting of the European Central Bank," said Paul Chertkow, head of global currency research at The Bank of Tokyo-Mitsubishi in London.

"Characterising monetary policy as still accommodative, he (Trichet) underpinned the expectation of another 0.25 point increase in the refinancing rate in the eurozone before mid-year."

Email

Print Friendly Page

Yahoo! MyWeb

Digg this

Del.icio.us