Euro Higher on Rate Hike Speculation

The euro gained 0.1 percent to $1.4238 this morning in New York to reach a five-month high against the dollar. Speculation that the European Central Bank will soon raise interest rates to deal with rising inflation has investors turning to the euro despite the ongoing debt crisis in Europe.

“It’s a risk-on and monetary tightening story,” said Jeremy Stretch, executive director of foreign-exchange strategy at Canadian Imperial Bank of Commerce in London. “Euro-dollar is a beneficiary of that, and looks like it’s going to continue to trade higher.”

Source: Bloomberg

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