Monetary officials in the United States are concerned about further U.S. dollar weakness after officials at the European Central Bank said it may hike interest rates as soon as next month, the Financial Times reported Monday.
On Thursday, ECB President Jean-Claude Trichet said an interest rate hike was "possible" in July and stressed that the ECB was "monitoring very closely" all events and that the central bank was "in a heightened state of alertness."
The hawkish rhetoric caught the foreign exchange market off guard and the euro rallied nearly two cents.
Citing "people familiar with the matter," the FT said officials in Washington are concerned that European rate hikes "could undermine efforts on both sides of the Atlantic to prevent the dollar weakening more against the euro."
By Adam Button and edited by Cristina Markham