Source AP ©

Euro rises close to all-time high against U.S. dollar

The euro rose to within a whisker of its all-time high against the dollar on Wednesday as a pair of lackluster economic reports weighed on the U.S. currency.

The euro flirted with its all-time high of US$1.3667 from December 2004, climbing to US$1.3651 in morning European trading before falling back to US$1.3638. It bought US$1.3626 late Tuesday in New York. The 13-nation euro was launched in 2002.

Traders were also waiting to see how the German Ifo business confidence survey for April would play out, with hopes for growth likely to push the euro higher.

The survey "will be closely watched again for suggestions that inflationary pressures will require a more hawkish stance over monetary policy from the ECB in the months ahead," said David Jones, chief market analyst of CMC Markets in London.

The European Central Bank has kept interest rates at 3.75 percent but is expected to raise them to 4 percent by June.

Higher interest rates, used to combat inflation, can bolster a currency by raising returns on certain types of investments.

The rise came after two widely watched indicators of U.S. economic health weighed on the dollar on Tuesday.

The National Association of Realtors reported sales of existing homes in March suffered their largest one-month decline since January 1989. That drop was accompanied by an eighth straight fall in median home prices, the longest such period of falling prices on record.

Also, the Conference Board reported consumer confidence fell more than expected in April due to higher gas prices and broader economic concerns.

The British pound stayed above US$2, rising to US$2.0062 before falling back to US$2.0030 in morning trading, above the US$2.0000 it bought late Tuesday in New York.

The pound broke through US$2 last week for the first time in nearly 15 years.

The dollar was down slightly against the Japanese yen, dipping to 118.51 yen from 118.70 yen the night before.

The euro has benefited from worries about the strength of the U.S. economy, raising concerns that the U.S. Federal Reserve might contemplate cutting interest rates even as its European and British counterparts continue raising theirs.

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