SINGAPORE: The euro was higher against the greenback in Asia Friday as surging inflation in the eurozone further stoked expectations for a interest rate hike this month, analysts said. The euro bought $1.4159 in early Asian trade, up from $1.4155 in New York late Thursday. It also gained against the Japanese currency, changing hands at 118.35 yen from 117.11. The dollar traded at 83.58 yen compared to 83.20 a day ago.
A soaring inflation rate in the eurozone was fuelling trader expectations that the European Central Bank (ECB) will raise interest rates within the month, analysts said. "Stronger than expected inflation data affirmed the case for ECB to raise rates in April and increases the possibility for more rate hikes down the road this year," Action Forex said in a report.
The ECB whose current interest rate stands at 1.00 percent is due to meet on April 7, and president Jean-Claude Trichet hinted at the beginning of March that the central bank would raise rates at the coming meeting. Data released by the European Union on Thursday showed inflation within the eurozone for March rising to 2.6 percent from 2.4 percent in February, putting it well above the ECB's two percent target for a fourth month. The inflation rate was also the highest since October 2008, when it hit 3.2 percent.
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