Thursday, July 3, 2008

Dollar Falls on U.S. Jobs Report, Europe's Inflation Fight

The dollar was knocked down Wednesday by a weak U.S. private-sector jobs report and worries from European Central Bank President Jean-Claude Trichet that inflation may "explode."

Fears of out-of-control inflation in the euro zone virtually ensure the ECB will raise interest rates after its policy meeting Thursday, providing the euro with an even better interest-rate-return advantage over the dollar. Analysts say price pressure may force the ECB to consider more rate increases later.

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