The euro gained against its major counterparts on Tuesday, amid heightened expectations over the interest rate hike in April by the European Central Bank (ECB). EUR/USD pair was up 0.3 percent at $1.4130, compared to a low of $1.4021 hit on Monday.
The single currency gained after ECB President Jean-Claude Trichet said inflation rates are durably above the price stability target.
Analysts said the rate hike speculation would keep the support for the euro above $1.40 level, despite concerns over the debt problems in the region. The euro rose to five-month high at 88.29 pence against the sterling on expectations that rates would rise sooner in the eurozone than the UK.
The Bank of England (BoE) said last week that it saw merit in waiting” to know the impact of higher oil prices before raising the rates, dampening speculations over rate hike in the near term.
The euro also gained 0.4 percent to 115.63 against the Japanese yen, its highest since the G-7 nations intervened in the currency markets to curb yen’s rise after a devastating earthquake hit the country.