Euro Rises Versus Dollar


The euro rose to within a cent of a record against the dollar as European Central Bank officials reiterated concern inflation is accelerating, increasing chances interest rates will stay at a six-year high.

Europe's currency rose for the first time in three days after policy maker Klaus Liebscher said record oil prices are starting to push up wages. The pound fell against the euro as the Bank of England unveiled a plan to swap government bonds for mortgage-backed securities to help revive lending between banks.

The euro rose 0.7 percent to $1.5921 at 9:41 a.m. in New York, from $1.5817 on April 18. Europe's currency reached $1.5983 on April 17, the highest level since its introduction in 1999. It appreciated for a sixth straight day against Japan's currency, increasing 0.4 percent to 164.60 yen, from 163.96. The dollar fell 0.3 percent to 103.38 yen, from 103.67.

The dollar remained lower against the euro as Bank of America Corp., the second-largest U.S. bank, reported a 77 percent drop in first-quarter profit. The Charlotte, North Carolina-based bank said profit fell as job losses and falling house prices caused more people to miss payments on credit cards and home loans.

U.S. policy makers have cut their main interest 3 percentage points since September to prevent the economy from slipping into a recession amid widening financial company losses, while the ECB has kept borrowing costs unchanged since June.


TradingEconomics.com, Bloomberg
4/21/2008 7:07:35 AM