The euro rose the most in two weeks against the dollar and gained versus the yen and the
British pound after European Central Bank President Jean-Claude Trichet said an
interest-rate increase in July is ``possible.''
The rally snapped three days of declines against the U.S. currency as Trichet
said policy makers are in a state of ``heightened alertness'' over inflation.
The yen dropped to a three-month low versus the dollar and fell the most against the
euro since March as an advance in stocks encouraged investors to buy
higher-yielding assets funded in Japan.
The ECB kept its main refinancing rate at six-year high of 4%, where it has
been since last June. The Federal Reserve has cut its target seven times since
September, to 2%, to stave off a recession.
The pound fell for a second day
against the euro after the Bank of England kept its key interest rate at 5%.
EUR/USD printed
low on $1.5360 before rising to $1.5540 amid Trichet’s comments. Later rate
refreshed session highs around $1.5600.
GBP/USD declined
from $1.9460 before rebounding to $1.9595/00.
USD/JPY printed
high on Y106.40 before retreating to $105.50.
Today’s focus is on Payrolls data at 12:30 GMT. Analysts predict employment fell 60K in May with unemployment rate rose to 5.1% from 5.0% month earlier.