Trichet’s Dollar Comments Hint at Rate Restraint Motivation
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The euro may have helped European Central Bank President Jean-Claude Trichet decide against a June interest-rate increase, economists said.
The single currency has gained almost 9 percent against the dollar this year, fueled in part by a transatlantic split in monetary policy as the ECB has started raising interest rates while the Federal Reserve shows no signs of following. Trichet yesterday dashed bets of some investors anticipating a rate increase next month and signaled policy makers are growing more concerned about the euro’s strength.