Euro jumps briefly

The euro got a brief boost on Wednesday after sources said the European Central Bank was likely to raise interest rates at least twice in 2006, while sterling fell after Bank of England minutes stoked talk of a UK rate cut.
Euro zone central bank sources told Reuters the ECB would probably tighten in March from the current 2.25 percent and at least once more next year, using its quarterly economic forecasts as a justification.
One member of the Bank of England Monetary Policy Committee voted for a rate cut in December, against expectations of a 9-0 vote for steady rates of 4.5 percent, minutes of the monetary policy meeting showed on Wednesday.
"The euro will be supported by the central bank story - there are greater expectations for rate rises in the eurozone than in the US," said Armin Mekelburg, currency strategist at Hypovereinsbank in Munich.
But he expects a UK rate cut in March which will be to the detriment of sterling.
The euro rose as far as $1.1911, but eased to $1.1870 by 1215 GMT, steady from the US close.
The euro also rose a third of a percent against sterling to 67.93 pence, while the pound hit 1-1/2 week lows against the dollar at $1.7480.
The dollar built on this week's recovery gains against the yen after recent US data reinforced expectations for further Fed tightening.
It rose to one-week highs of 117.32 yen. The dollar fell 4 percent against the yen last week - its biggest one-week loss in six years.
In the absence of much market-moving data ahead of Christmas holidays, the focus is turning to the final estimate of third-quarter US growth data, due at 1330 GMT.
The data is expected to confirm the world's biggest economy was growing at a healthy pace of 4.3 percent.
Richmond Fed President Jeffrey Lacker speaks at 1800 GMT.
Japanese markets will be closed on Friday for a national holiday, while European and US markets will be closed on Monday for Christmas. The largest mover among currencies of industrialised nations was the New Zealand dollar, which fell 0.40 percent to 5-week lows against the US dollar after news of a record trade deficit in New Zealand in the third quarter.
Investors were buying dollars earlier this year in anticipation of a widening interest rate gap between the US and the eurozone, with the Federal Reserve expected to raise interest rates in January to 4.5 percent. But some analysts see US rate rises stopping there. The latest report about the ECB is seen as likely to boost the euro.