The euro rose against the yen and dollar on Thursday after the head of the European Central Bank, Jean Claude Trichet, reduced speculation of a rate cut, warning about inflationary pressure.

The ECB stands ready to counter upside risks to price stability, Trichet said at a press conference in Frankfurt. He noted that other ECB members were favoring an increase in the bank's key interest rate from the current 4 percent level. Financial markets had previously expected that the bank would keep rates steady, with many anticipating a cut.

The euro was at $1.4633 at 2:01 p.m. in New York after reaching a peak of $1.4636 earlier in the trading session. The euro also rose versus the yen to 162.75.

Yesterday, the Bank of Canada unexpectedly dropped its benchmark interest rate on concerns that the effects of the subprime mortgage crisis could affect it.

Looking ahead, the U.S. government will release a payroll report.