Euro Rallies on Hawkish Sentiment

European Central Bank President Jean-Claude Trichet described the ECB's approach to inflation as "careful monitoring", according to

. Trichet warned that it was important to prevent commodity-price increases from affecting long-term inflation expectations. If economic agents price in higher future inflation, it could affect wages and prices. The euro appreciated against world currencies after those statements by Trichet and a

, which indicated that French consumer confidence was up for the month of May. French consumer confidence increased to 84 from 83 in April. Apparently, that was enough to counter-act the effects of

report. Italian business confidence declined from 102.6 in April to 101.3 in May. Most analysts had expected the rating to increase to 102.8. Traders looking to play the euro may consider CurrencyShares Euro Trust

. Those looking to aggressively play a long euro might consider Ultra Euro ProShares

. FXE attempts to return a value corresponding to the strength of the euro, while ULE tries to accomplish the same but is leveraged. Will this rally in the euro prove temporary, or is it the start of a longer trend?