The euro rose against the dollar today after comments from European Central Bank official Nout Wellink doused euro zone rate cut speculation.
Cutting interest rates "is not on my mind", today's International Herald Tribunequoted European Central Bank Governing Council member Nout Wellink as saying.
"Wellink's comments were surprisingly hawkish, much more so than other recent ECB comments, and that drove euro/dollar higher," said Derek Halpenny, currency economist at Bank of Tokyo-Mitsubishi. "It also brought the dollar up against other currencies."
The euro rose a third of a per cent from the US close to $1.2129 by 0745 GMT, though well below a one-month high of around $1.2255 hit on Tuesday. The euro hit 14-month lows below $1.1870 last week.
Speculation that China may soon revalue its currency also boosted the yen.
The Financial Timesreported today the Bush administration had told two key senators that it expects China to revalue the yuan in August, before President Hu Jintao visits Washington in September.
Reform of the yuan is expected to have a knock-on positive effect on other Asian currencies.
But China's currency regulator restated Beijing's long-held stance that there was no timetable for a possible change in the yuan's peg.