Euro hits four-week high after report of ECB rate hike talks

New York

THE euro hit a more than four-week high against the dollar on Friday after a report that the European Central Bank had discussed the possibility of raising interest rates before the end of its quantitative easing programme.

Sources told Reuters that some ECB policymakers had suggested hiking rates from their current record lows before the end of QE stimulus, but that the discussion was brief, and the idea did not have broad support. "I have no idea whether the reports are correct or not but it shows where we are," said Axel Merk, president and portfolio manager at Merk Hard Currency Fund in Palo Alto, California. "It shows that the discussions (at the ECB) are leaning towards, 'How do we get out of QE?' . . . There's been a fundamental shift, but it's a fundamental shift that's been gradually sinking in." Mr Merk noted multiple reports from eurozone countries supporting the premise that the economy is gaining traction. The ECB raised its growth and inflation ta…