Euro rises to over US$1.30

Euro Surges
24 Nov 2006 12:45:00

By Christos Pagonis


The euro rose to US$1.30 for the first time since April 2005 on speculation the European Central Bank will increase interest rates in 2007. The exchange rate of the euro against the US dollar reached 1.30086, to subside later at US$1.3063, boosted by 1%, for the first time since April 2005. In statements with the Bloomberg site, Dredner Kleinwort currency strategist Tim Fox from London said, "There’s a psychological significance to the $1.30 level. We remain optimistic on the European economy. There’ll be another rate hike next year.’’

The 12-nation currency has gained 10.3% this year as eurozone growth is poised to grow at its fastest pace in six years. Policy makers, including President Jean-Claude Trichet, have warned about the threat of inflation.