John Taylor, the head of FX Concepts LLC, the world’s largest currency hedge fund, notes that by June the European currency may climb to 13-month maximum versus US dollar as the European Central Bank will soon lifts up interest rates,

Yesterday the ECB President Jean-Claude Trichet claimed that the central bank may raise next month its benchmark interest rate from 1% level for the first time since 2008 in order to stem rising inflation. That would inevitably lead to euro’s gains, at least temporary, noted Taylor. In his view, the pair EUR/USD may advance to $1.45 per dollar, the maximal level since January 15, 2010.

However, the specialist believes that then, by the third quarter, the European economic growth will slow down and euro will depreciate. In his view, “there’s a recession coming”.