FX round-up: Dollar rises versus euro

LONDON (ShareCast) - The dollar rose against the euro after a surprise gain in US productivity while comments from a Federal Reserve official that interest rates must be raised to keep inflation in check also boosted the greenback.

Kansas City Fed President Thomas Hoenig said the Fed has to be ready to increase rates in light of "troublesome" inflation. He also said he was not in favour of more interest rate cuts. US interest rates currently stand at 2%.

The Labor Department said productivity rose at an annual rate of 2.2% in the first three months of the year, higher than expectations. The report also showed that labor costs slowed.

The euro came under pressure following weak European data on retail sales.

Sterling fell on Wednesday as investors digested a gloomy outlook on consumer sentiment. According to figures from the Nationwide building society consumers are less confident than at any time since began collecting data in May 2004.