US interest rates 'may top 5.25%'

US interest rates are set to move to 5.25%, and the possibility of even higher rates will likely keep the euro/dollar rate at $1.25, according to the June Bank of Ireland Global Markets Economic Research Bulletin.

Bank of Ireland chief economist Dan McLaughlin said: "The market believes that another quarter point increase in US rates in late June is inevitable, taking short rates to 5.25%, and is giving a high probability of a 5.5% Fed Funds rate at the August meeting.