The euro advanced to the highest level in a week versus the US dollar today after member of the European Central Bank Executive Board Lorenzo Bini Smaghi said that the inflation pressure may force the bank to raise the interest rates.
Bini Smaghi said:
As the economy gradually recovers and global inflationary pressures arise, the degree of accommodation of monetary policy has to be monitored and, if needed, corrected.
The ECB policy makers look worried as the inflation rose above the central bank’s target of 2 percent and is at is growing with the fastest pace in more than two years.
EUR/USD opened today at 1.3608, fell to 1.3545 but then rebounded to 1.3671 as of 17:54 GMT.
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