Euro at 5-Month High Versus Dollar on Rate Outlook; Pound Surges

The euro reached a five-month high against the dollar amid speculation the European Central Bank will raise interest rates next month to tame inflation.

Britain’s pound surged as data showed consumer-price growth surpassed economists’ forecasts. European Central Bank Executive Board member Gertrude Tumpel-Gugerell and Governing Council member Yves Mersch both said yesterday that “strong vigilance” is necessary to keep a lid on inflation. The Dollar Index, which tracks the U.S. currency against six major peers, fell to a 15-month low. New Zealand’s dollar rose for a third day.