LONDON, Aug 21: The dollar and yen both fell against the euro on Monday as expectations of rising interest rates in the eurozone boosted the European single currency, dealers said.

While the European Central Bank is forecast to keep raising rates, data in the US and Japan have indicated that borrowing costs there are likely to stay steady, analysts believe.

In late European trading, the euro jumped to $1.2911 from $1.2825 late in New York on Friday, near its highest level this year of $1.2979.

Against the yen, the euro reached its highest-ever level of 149.74 yen.

The dollar strengthened to 115.89 yen, from 115.77 yen on Friday.

“The dollar has been undermined against the euro by the prospect that interest rate differentials between the US and the eurozone will continue to narrow,” said Paul Chertkow, head of global currency research at the Bank of Tokyo-Mitsubishi.

Owing to signs of a slowing US economy, the Fed had earlier this month slammed the brakes on its two-year campaign of back-to-back interest rate hikes.

The euro was changing hands at $1.2911 against 1.2825 on Friday, 149.66 yen (148.53), 0.6814 pounds (0.6813) and 1.5789 Swiss francs (1.5819).

The dollar stood at 115.89 yen (115.77) and 1.2230 Swiss francs (1.2331).

The pound was being traded at $1.8963 (1.8818).

On the London Bullion Market, the price of an ounce of gold climbed to $625 per ounce, from $613.90 late on Friday. —AFP