The European Central Bank left its key interest rate unchanged and the bank's president suggested it would hold off at least until July before raising borrowing costs again to quell inflation, according to AP. Its president Jean-Claude Trichet said Thursday the bank would "monitor very closely" the risk of higher inflation. Economists who follow the bank say that wording means no rate increase at June's meeting. Investors had been expecting Trichet to say the ECB was practicing "strong vigilance" over inflation, which in the past has been a key phrase to suggest a rate increase the following month. Those predictions had helped buoy the euro towards 18-month dollar highs as higher rates can boost a currency by attracting investors. Following his remarks, the euro fell sharply from around $1.48 when Trichet began his remarks to around $1.4682. Despite the pause in rate hikes, Trichet has made it clear that borrowing are going higher, as the bulk of Europe's economy sees more growth and inflation despite the debt crisis in Greece, Ireland and Portugal. The bank raised its key rate a quarter point to 1.25 percent last month, and has indicated that further increases are likely this year especially as economies like Germany's speed ahead and consumer prices are rising at 2.8 percent a year - above the ECB's target rate of just below 2 percent. -- SPA
