By: Barbara Zigah

Ahead of today’s meeting of the European Central Bank’s rate setting committee, the common currency Euro has been rising toward a 17-month peak against the U.S. Dollar in Asian trade. Investors continue to speculate that the divergent policies of the ECB and the Federal Reserve Bank will benefit the Euro, though some analysts believe that recent comments from ECB officials suggest that further tightening may be in the distance. Too, today’s rise in the Euro snaps a 2-day drop against the Japanese Yen.

As reported at 2:00 p.m. (JST) in Tokyo, the Euro traded against the greenback at $1.4860, up from $1.4827 traded in New York late yesterday; it approached $1.4940 at one point, the highest price since late 2009. Against the Japanese Yen, the Euro traded at 119.44 Yen, up from 119.55 Yen.

What is expected at today’s ECB meeting is that Jean-Claude Trichet, the ECB President, will once again highlight the risks of inflation and its links to energy, commodity and food prices. It is further expected that he will discuss exactly how quickly the ECB is willing to raise interest rates to combat inflationary pressures at the risk of putting further pressure on the Eurozone’s fiscally troubled states.