Euro Gains on Bets ECB Will Raise Rates Even Amid Debt Turmoil

Bloomberg
April 19, 2011

The euro advanced for the first time in four days against the yen and gained versus the dollar on speculation the European Central Bank will raise interest rates further even as nations such as Greece struggle to contain sovereign-debt turmoil.

The Swedish krona rallied versus all of its major counterparts on speculation the Riksbank will increase borrowing costs tomorrow. Canada’s dollar climbed the most in two months versus the U.S. currency as inflation accelerated. The 17-nation euro rose as a boost in German manufacturing outweighed Greece’s record two-year note yield above 20 percent.

“The ECB’s message has been very clear, which is that they want to continue to raise interest rates,” Kathy Lien, director of currency research at the online trader GFT Forex in New York. “That in conjunction with positive data is helping to keep the euro propped.”

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