Dollar Rises to One-Year High Against Euro

The dollar rose to the highest level in a year against the euro Thursday on speculation that economic growth in Europe will be slower than in the U.S., prompting the region's central bank to lower interest rates.

The U.S. currency climbed for a second day as traders raised bets that the European Central Bank will cut borrowing costs before a government report tomorrow likely to show industrial production in the euro area shrank.

The U.S. currency climbed to $1.3895 per euro, the strongest since Sept. 18, 2007, before trading at $1.3929 as of 11:37 a.m. in London, from $1.3998 yesterday.

The pound fell against the dollar after Bank of England policy maker David Blanchflower said job losses will triple as the economy slows.

The British currency traded near a 2 1/2-year low against the dollar after Blanchflower said in testimony to lawmakers today unemployment in Europe's second-largest economy will rise to 60,000 a month, from its current level of 20,000.

The U.K. currency fell to $1.7489 as of 11:40 a.m. in London, the weakest since April 2006, from $1.7530 yesterday. Against the euro, the pound traded at 79.66 pence, from 79.88 pence yesterday.