Euro falls against USD following ECB rate increase

The ECB boosted interest rates last week, causing the euro to fall from almost a 15-month high against the U.S. dollar on bets that higher interest rates will cause difficulty for troubled European economies such as Ireland and Portugal to contain debt.

Meanwhile the Japanese yen gained over all of its major counterparts, rising from an 11-month low against the euro, after an aftershock of Japan’s March 11 earthquake discouraged demand for riskier assets. In the U.S., comments from Federal Reserve Vice Chairman Janet Yellen that rising food and fuel costs don’t warrant an end to government stimulus spending caused the dollar to remain lower versus the yen.

The euro decreased 0.4 percent to $1.4431 at 4:06 p.m. in New York, from $1.4483 on April 8, when it reached $1.4489, the highest level since January 2010. The yen gained 0.6 percent to 122.05 against the euro, from 122.76, reversing an earlier slide to 123.33, the weakest level since May 5. Japan’s currency appreciated 0.2 percent to 84.62 per dollar, from 84.76, after touching 85.53 on April 6, the weakest level since Sept. 21.

Source:  Bloomberg

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