Euro Hits New Record High vs Dollar


The euro rose to a record after European Central Bank President Jean-Claude Trichet said there is ``strong upward pressure on inflation,'' signaling he's in no hurry to cut interest rates.

Policy makers left the main rate at 4 percent today, as forecast by economists surveyed by Bloomberg News. The yield advantage on two-year German notes over U.S. Treasuries widened to the most in 15 years as traders bet the Federal Reserve will cut rates at least half a percentage point by March. 18.

The euro climbed to $1.5373, the highest level since the single currency's debut in 1999, before trading at $1.5344 by 10:05 a.m. in New York, from $1.5265 yesterday. The common European currency was at 158.37 yen, from 158.76 yesterday.

The euro advanced against the pound after the Bank of England kept borrowing costs at 5.25 percent earlier, as forecast by economists in a separate survey. The common currency climbed to an all-time high of 76.92 British pence, before trading little changed at 76.58 pence.

The euro gained 17 percent against the dollar in the past year, eroding the competitiveness of European exports. The synthetic euro, which estimates the European currency's value before its inception in 1999, advanced to the strongest level since at least January 1989, when Bloomberg's data on the measure began.


TradingEconomics.com, Bloomberg
3/6/2008 7:38:24 AM