Euro rises to one-month high after ECB rate hike talk

Euro rises

The euro hits to one-month highs against the dollar on Friday after a report that the European Central Bank had discussed the possibility of raising interest rates before the end of its quantitative easing program.

The euro was up 0.2 percent at $1.0699 after rising as high as $1.0701, its highest level since Feb. 9.

According to sources, some members of the ECB's Governing Council discussed the possibility of higher interest rates at last week's policy meeting, but talk on the issue was brief and did not receive broad support.

The euro's gains were limited by expectations that the U.S. Federal Reserve would decide to raise interest rates at its two-day policy meeting ending on Wednesday, after U.S. employers hired workers at a robust pace in February.

The headline figure exceeded expectations and wages also rose, though by less than some economists expected. Overall, the non-farm payrolls report reinforced market expectations that the Fed will hike interest rates this week despite slowing economic growth.

Wage growth rose 0.2 percent, falling short of an expected 0.3 percent increase, which caused U.S. Treasury yields to recede from last week's 12-week highs.

As market participants ponder the outlook for future monetary policy moves, day-to-day trading this year has vexed some investors.

The dollar edged down 0.2 percent against its Japanese counterpart to 114.66 yen below Friday's high of 115.50 yen, which was the highest since Jan. 19.

Sterling added 0.2 percent to $1.2189, moving away from last week’s eight-week lows.

The pound lost almost 1 percent against the euro on Friday after the ECB news. The single currency was last up 0.1 percent at 87.83 pence after rising as high as 87.86 pence, its loftiest peak since Jan. 17


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