Euro rose against the Dollar on Tuesday trading above 1.6000 for the first time since its 1999 inception amid growing expectations that the European Central Bank's next move may be an interest rate hike.
ECB Governing Council Member Christian Noyer said the bank would do what is needed to bring inflation back to its target of just below 2%, adding that the central bank would move rates if needed. That followed comments from Governing Council member Yves Mersch, who said the ECB has to ask itself each month whether a rate rise is needed to control inflation.
ECB is seen keeping rates at least at a six-year high of 4% for a while. In contrast, markets expect the Federal Reserve to lower benchmark US rates further from the current 2.25% at a policy meeting on April 29-30.
US economic data on Tuesday showed the housing market remains soft, with existing home sales falling 2% last month to 4930k.
The Bank of Canada cut its benchmark interest rate by 50bp as expected.
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