The Dollar rallied broadly on Thursday after data showed a surprisingly strong gain in US retail sales, up 1% last month, boosting expectations that the Federal Reserve may raise interest rates this year.
Philadelphia Fed President Charles Plosser was the latest monetary policy official to hint at the possibility of higher US interest rates. On Thursday, he said current US monetary policy was supportive for growth but the Fed needs to stay vigilant in keeping inflation expectations contained.
French economy minister Christine Lagarde said that the ECB may even reconsider the July move after this weekend's G8 meeting. ECB Executive Board member Lorenzo Bini Smaghi said the bank will do what is needed to lower inflation but it has given indications on policy moves only as far as July.
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