The euro was lower against the U.S. dollar Thursday, a day after the president of the European Central Bank warned that an inflation price spiral was evident in the euro zone, AP reported. The 15-nation euro bought US$1.5730 in morning European trading, down from US$1.5746 in New York late Wednesday. The British pound fell to US$1.9776 from US$1.9818 as markets awaited a decision by the Bank of England on interest rates there. Britain's central bank is expected to hold the rate steady at 5 percent as concerns about rising inflation outweighed worries over the slowing economy. «In the unlikely event that we do see some movement here then (the pound) will react appropriately, but there's nothing to suggest that (BoE governor) Mervyn King is on course to be making any bold calls like this later today,» said currency analyst James Hughes at CMC Markets. Inflation fears abounded Wednesday as ECB President Jean-Claude Trichet told European Parliament lawmakers that unchecked wage increases could result in higher prices across the euro zone. The ECB's governing council «is strongly concerned that price and wage-setting behavior could add to inflationary pressures,» he said, adding that current inflation levels were «worrying,» and set to stay high before cooling gradually next year. In other trading, the dollar bought 107.21 Japanese yen compared with 107.45 yen late Wednesday in New York.
