The euro is climbing against the dollar as an inflation reading in Europe bolstered investor expectations that the European Central Bank will raise interest rates in April, The Associated Press reports.
Consumer prices in euro countries were up 2.6 percent in March, the fastest increase since October 2008.
Central banks raise interest rates to help counter inflation. But higher rates on government bonds increase demand for the currency linked to that country or region.
Debt problems in Europe are weighing on the euro however. Portugal says its budget deficit last year was larger than expected, and Ireland’s tests on its banks are expected to show billions more in aid is needed for its financial sector.
In morning trading Thursday in New York, the euro rose to $1.4177 from $1.412 late Wednesday. The dollar also fell against the yen but is higher against the British pound.
