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Euro gains against dollar

June 05, 2007

LONDON, June 4: The euro gained against the dollar on Monday after stronger-than-expected eurozone inflation data ahead of this week’s interest rate decision from the European Central Bank, dealers said.

In late European trading, the euro firmed to $1.3494, from $1.3442 in New York late on Friday.

The dollar eased to 121.73 yen, from 122.09 yen on Friday.

Eurozone producer prices rose 0.4 per cent in April from March, and were up 2.4 per cent year-on-year, slightly higher than the 2.2 per cent expected by analysts.

An analyst at consultancy Global Insight, Howard Archer, said the data were likely to strengthen the ECB’s view that manufacturers are pushing through price hikes to boost their margins.

“Consequently, we believe that the ECB is highly likely to follow a seemingly inevitable 25 basis-point interest rate hike to 4.00 per cent on Wednesday with another hike to 4.25 per cent in September,” he said.

On the London Bullion Market, the price of gold increased to $671.10 per ounce, from $666.50 late on Friday.—AFP