June 07, 2007	Thursday	Jamadi-ul-Awwal 21, 1428

LONDON, June 6: The euro fell against the dollar on Wednesday after the European Central bank announced an increase in interest rates but remained vague about the scale of future hikes.

European Central Bank president Jean-Claude Trichet failed to give a clear signal, as some investors had hoped for, that several interest rate increases were planned this year.

In late European trading, the euro slipped to $1.3493, from $1.3519 in New York late on Tuesday. It pulled back to 163.31 yen, following a record high of 164.60 yen the previous day.

The ECB raised its key rates by a quarter-point to 4 per cent and Trichet later told a press conference that ECB monetary policy was “still accommodative.” A reference to an “accommodative” stance is seen as a signal that more rate rises could be approved in coming months but not necessarily at the next meeting of the bank's policy-making body.

The bank also updated its economic forecasts, with analysts focusing on the decision to leave unchanged the inflation forecast for 2008 of 2 per cent.

In late European trading, the euro was changing hands at $1.3493, against $1.3519 on Tuesday, 163.31 yen (164.11), .6774 pounds (0.6782) and 1.6426 Swiss francs (1.6469).—AFP