The euro reached new record highs against sterling and the US dollar today, lifted by a series of economic figures from both sides of the Atlantic.
The dollar plunged to an all-time low of $1.5979 on news of a record rise in euro zone inflation, a fresh downturn in the US housing sector and a modest gain in US consumer prices. Meanwhile, the euro hit 80.85p against sterling.
Eurostat, the EU statistics office, reported that the annual inflation rate in the euro zone was 3.6% in March, its highest level since the creation of the euro in 1999. Analysts said this was likely to mean the European Central Bank would keep interest rates unchanged for the foreseeable future. This boosts the euro's attractiveness to investors.
The US figures were seen as giving the Federal Reserve leeway to lower interest rates again soon, while the Bank of England is also expected to make further cuts in UK rates to boost the British economy.
