The euro climbed against the dollar on Thursday ahead of a European Central Bank meeting, where eurozone interest rates were expected to be left on hold, dealers said.
The British pound meanwhile advanced against the US currency before a separate rate decision from the Bank of England, which was also forecast to sit tight even though some economists had forecast a hike amid surging inflation.
In late morning trading in London, the European single currency rose to 1.5473 dollars from 1.5408 in New York late on Wednesday.
The dollar increased to 109.44 yen from 109.76, holding close to a seven-month high against the Japanese currency.
"The focus rests on the ECB and BoE rate decisions," said Calyon analyst Stuart Bennett on Thursday.
Europe's main interest rates will probably remain on hold as ECB and BoE governors get to grips with both rising inflation and a possibility of recession in the 15-nation eurozone and Britain.
A poll of 46 private banks by Dow Jones Newswires found all of them expected the European Central Bank to leave its main lending level unchanged at 4.25 percent, after raising the rate by 0.25 percent in July.
In London, the Bank of England was likewise predicted to hold rates at 5.0 percent at 1100 GMT. Some analysts were holding out for a rise to 5.25 percent as Britain battles surging inflation caused by rocketing energy and food prices.
The ECB announces its decision at 1145 GMT and this will be followed by a keenly-awaited press conference from ECB president Jean-Claude Trichet.
US Federal Reserve governors kept their main rate on hold at 2.0 percent on Tuesday after wrestling with the same dilemma of slowing activity against a spike in inflation pressures.
"In line with the consensus, we expect the ECB to also keep rates on hold today at 4.25 percent," Bennett added.
"Given the rhetoric from Governing Council members over the past few months, however, we still feel that the door is open for another rate hike later in the year.
"Whilst very weak eurozone data continues to signal problems ahead for the (economic growth) outlook ... the bank's sole focus on inflation implies that it will be difficult for Trichet to alter his rhetoric too much without risking undermining his credibility."
Ahead of Thursday's rate call by the Bank of England, a key survey pointed to fresh weakness in Britain's flagging property market.
The country's house prices fell by 1.7 percent in July from the June level, dropping for the fourth month running amid the global credit crunch, major home loan provider Halifax said.
House prices tumbled by 8.8 percent in July from the level 12 months earlier, according to a monthly Halifax survey.
In London trade on Thursday, the euro changed hands at 1.5473 dollars against 1.5408 late on Wednesday, at 169.29 yen (169.13), 0.7931 pounds (0.7911) and 1.6334 Swiss francs (1.6335).
The dollar stood at 109.44 yen (109.76) and 1.0560 Swiss francs (1.0602).
The pound was at 1.9502 dollars (1.9476).
On the London Bullion Market, the price of gold rose to 882.50 dollars per ounce from 879.50 dollars late on Wednesday.
Copyright 2008, by
AFP
. All rights reserved
BoE says keeps interest rates at 5.0 percent
Salaries in Dubai – let’s just be grateful 