Euro Declines as Interest Rates Can Hurt Indebted Nations

The euro pared its five-day gains versus the US dollar as the anticipated interest rates increase can cripple the most indebted nations of the Eurozone.

Analysts predict that the European Central Bank will raise its benchmark rate by 25 basis points on April 7 from the record low of 1 percent. Such increase will be beneficial for the strong economies, like the German one, but can be disastrous for the peripheral nations, like Ireland and Portugal.

EUR/USD rose from 1.4231 to 1.4268 earlier today, but later dropped and traded at 1.4205 as of 9:33 GMT.

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