Euro Rises Against Dollar


The euro rose for the first time in three days against the dollar after Europe's economy grew more than forecast, reducing the chances that the European Central Bank will lower interest rates.

The single currency also traded near a one-week high versus the yen after data showed German's economy expanded at the fastest rate in 12 years in the first quarter. The New Zealand dollar dropped for a third day on speculation the nation's central bank will reduce borrowing costs this year after retail sales slumped.

The euro advanced to $1.5501 versus the dollar as of 6:30 a.m. in New York, from $1.5474 yesterday. The single European currency traded at 162.71 yen, from 162.52.

The euro, which dropped last week to $1.5285, its lowest since March 11, gained after the European Union's statistics office said the economy grew 0.7 percent from the previous quarter.

The ECB has avoided interest-rate cuts since last year, keeping its main refinancing rate at a more-than six-year high of 4 percent, to curb inflation. Data today showed European consumer prices rose 3.3 percent in April from a year earlier, slowing from 3.6 percent the previous month.


TradingEconomics.com, Bloomberg
5/15/2008 6:26:44 AM