Euro Surpasses $1.60 for First Time

The euro surpassed $1.60 for the first time as European Central Bank officials said they'll increase interest rates if inflation doesn't slow., Bloomberg 4/22/2008 10:14:25 AM

The dollar weakened for a second straight day as oil surged above $119 a barrel and Federal Reserve Bank of Dallas President Richard Fisher said inflation is starting to grip U.S. consumers.

The euro advanced 0.5 percent to $1.5988 at 1:07 p.m. in New York, from $1.5912 yesterday. It touched $1.6019, the highest since Europe's currency debuted in 1999. The euro traded at 164.32 yen, unchanged from yesterday. The dollar dropped 0.5 percent to 102.76 yen, from 103.27.

The 15-nation currency strengthened against the dollar as ECB governing council member Christian Noyer said policy makers will act to restrain consumer prices if inflation doesn't slow.

The euro has surged 1.4 percent in April and 9.7 percent this year against the dollar on speculation inflation will encourage the ECB to hold its target lending rate at a six-year high of 4 percent. A European Union report showed last week that annual inflation rose to a 16-year high of 3.6 percent in March.

The dollar extended its drop against the euro after a U.S. industry report showed sales of previously owned homes fell in March. Purchases dropped 2 percent to an annual rate of 4.93 million, from 5.03 million in February, the National Association of Realtors said today in Washington.

Euro Surpasses $1.60 for First Time