The euro rose in relation to most major currencies during the week ending March 3. It was up 1.3 percent to $1.2031 versus the US dollar, gained 1 percent to ¥140.12 against the Japanese yen, and rose 0.8 percent in relation to sterling, to £0.6859.

The euro’s success came as the European Central Bank once again raised interest rates by a quarter point, to 2.5 percent, after having hiked rates by the same amount in December. Comments from ECB board members made it clear that interest rates will go up again in the foreseeable future. Besides raising rates, the ECB also revised its forecasts for growth and inflation for the year, predicting that both will be higher than previously expected.

Accordingly, Goldman Sachs raised its forecast for eurozone interest rates at the end of the year from 2.5 percent to 3 percent. Meanwhile, analysts at Citigroup attributed at least part of the euro’s advances to the narrowing yield spread between two-year government bonds in the eurozone and the United States.

Tags: Exchange Rates News, Interest Rates News, ECB: European Central Bank News //