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.