LONDON: The euro fell against the dollar, European stock markets diverged and the price of gold struck a record high on Friday amid fears over spiking global inflation and euro-zone debt, analysts said.
The euro fell to $1.4448 in London trade from $1.4488 late in New York on Thursday.
The dollar slipped to 83.14 yen from 83.47 yen Thursday.
Inflation has hit 2.7 percent across the debt-ravaged euro-zone, official data showed Friday, leaving analysts to tip a sharper rise in interest rates.
The March rate for the 17 states that share the euro currency had initially been pegged at 2.6 percent already way above European Central Bank hopes for medium-term inflation just below two percent.
Last week the ECB lifted its key interest rate for the first time in nearly three years in a signal to markets that price stability, rather than debt worries in euro-zone members such as Greece and Ireland, was its top priority.
But the bloc's debt woes were in fresh focus on Friday as Moody's slashed its credit ratings on Ireland to just above junk status, citing an "expected decline" in state finances that is set to hamper the nation's recovery.
"With core euro-zone inflation rising significantly in March, the ECB seems highly likely to follow up its initial interest rate hike from 1.00 percent to 1.25 percent at its April meeting with another move before long," said Howard Archer, economist at research group IHS Global Insight.
"Admittedly, the March inflation data increases the risk that the ECB could tighten interest rates more aggressively than this.
"However, we believe that the ECB will be wary about raising interest rates aggressively due to the growth headwinds facing the euro-zone and the problems higher interest rates will cause for Greece, Ireland, Portugal and Spain."
Markets also digested news of spikes to inflation in China and India, which helped push safe-haven gold to a record high of $1,479.35 an ounce.
"It seems investors are still more concerned about the threat of debt-default by peripheral EU nations and rising inflation indicators following higher-than-forecast inflation readings from India and China," said James Moore, analyst at research group Fast Markets.
The precious metal hit the new pinnacle shortly before China said that its inflation had hit a 32-month high, suggesting Beijing's efforts to rein in soaring costs are still falling short.
China's consumer price index rose 5.4 percent year-on-year in March the fastest pace since July 2008 and well above the government's 2011 target of four percent and 5.0 percent in the first quarter.
"Economic data from China had a mixed reception in London this morning, as robust Chinese GDP growth was offset by climbing inflation concerns," said IG Index trader Ben Critchley.
"In general the FTSE was firmer on the news, though miners slipped on fears that spiralling inflation could signal yet another interest rate hike in the world's second biggest economy.
"Banks were broadly weaker too, as Moody's cut Ireland's credit rating by two notches to Baa3, indicating that all is not well in the euro-zone," he added.
London's benchmark FTSE 100 index rose 0.26 percent to 5,979.53 points approaching midday trade Frankfurt's DAX 30 gained 0.38 percent to 7,173.32 points, while in Paris the CAC 40 fell 0.18 percent to 3,963.33.
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