Interesting news out of Europe, where the European Central Bank raised its main lending rate 25 basis points (or a quarter-percent for the non-finance-geeks) from 4% to 4.25%. The ECB is the analog to the Federal Reserve for the countries using the Euro. They're having to fight off inflation, which is at an Euro-era record of 4%.
In the short term, that will put pressure on the dollar, as short-term investors will tend to move money out of the US and into higher-yielding Euro-denominated stuff. However, the high inflation in the Eurozone will tend to help the dollar regain its footing, if the US can keep its inflation below European levels.
The problem with raising interest rates is that it tend to slow down the economy. In a era where the EU elites are trying to push through the current Lisbon Treaty round of reforms, having the ECB be an economic bogey-man if Europe goes into a recession might not be great for EU integration.
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