Euro rises against the U.S. currency

The 12-nation currency bought US$1.2724 in afternoon trading, up from US$1.2715 the night before in New York. The last time the euro rose that high was in May 2005.

The euro was bolstered in part not by the ECB's decision Thursday to leave interest rates unchanged at 2.5 percent, but by the language of bank president Jean-Claude Trichet, who said high oil prices and advancing economic growth would cause the bank to remain "vigilant" about protecting against inflation.

Analysts took that as a sign that the interest rate would be increased to 2.75 percent when the bank meets June 8 in Madrid, Spain. Higher rates can buoy a currency by making some kinds of investments more attractive, the AP reports.

The dollar slipped after a new report by the U.S. Labor Department showed that new hiring slowed significantly in April as employers added just 138,000 people to their payrolls, the slowest pace of job growth in six months. The overall unemployment rate held steady at 4.7 percent.

The dollar fell against the Japanese currency, dropping to 112.50 from 113.38 yen late Thursday.

The British pound rose to US$1.8569 from US$1.8542 after the Bank of England kept its benchmark interest rate unchanged at 4.5 percent on Thursday and signs that a first-quarter slowdown were an anomaly and not the norm.

 

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