Euro rose against the Dollar on Tuesday trading above 1.6000 for the first time since its 1999 inception amid growing expectations that the European Central Bank's next move may be an interest rate hike.

ECB Governing Council Member Christian Noyer said the bank would do what is needed to bring inflation back to its target of just below 2%, adding that the central bank would move rates if needed. That followed comments from Governing Council member Yves Mersch, who said the ECB has to ask itself each month whether a rate rise is needed to control inflation. The comments, combined with a mixed reading on US existing home sales in March, helped push the European currency through the key 1.6000 level.

EurUsd traded as high as 1.6019 but later gave back some its gains to close at 1.5975 +0.39%. UsdJpy traded down 0.22% at 102.92. UsdChf dropped 0.48% to 1.0036 and GbpUsd rose 0.69% to 1.9961.

ECB is seen keeping rates at least at a six-year high of 4% for a while. In contrast, markets expect the Federal Reserve to lower benchmark US rates further from the current 2.25% at a policy meeting on April 29-30.

US economic data on Tuesday showed the housing market remains soft, with existing home sales falling 2% last month to 4930k. Elsewhere, the Canadian dollar fell after the Bank of Canada cut its benchmark interest rate by 50bp as expected. UsdCad last traded up 0.2% at 1.0081.