Euro pares gains after tough talk on rate hikes

Dubai: The euro touched a two-month high against the dollar last week, but fell sharply after the European Central Bank (ECB) interest rate meeting reduced expectations of further euro zone interest rate increases. This week's focus will be the Group of Eight (G8) summit and whether the leaders will send a message strong enough to reverse the course of record high oil prices and the dollar's overall fall. Markets will also keenly await the Bank of England's (BoE) rate decision due on Thursday. Euro The euro commenced the week on a strong note, supported by market expectations of an ECB interest rate rise by 25 basis points to 4.25 per cent at its policy meeting later in the week, and possibly further beyond that. The expectations were cemented by data showing that euro zone consumer prices jumped to a record high four per... [read full story]