The euro continued to rise against the dollar after a key survey on the German business climate came in stronger than expectations, cementing market expectations that the European Central Bank will hike interest rates further on March 2. The Ifo Institute said its business climate index jumped to 103.3 in February from 101.8 in January, the highest level in over 14 years and well above the 101.7 forecast by analysts polled by AFX News. Expectations for the coming months also continue to be very positive, with the business expectations index increasing to 104.8 from 103.8 and suggesting that firms are not yet too troubled by the prospect of higher interest rates. The strong reading bodes well for the economic growth outlook in the euro zone and Germany, and makes a quarter point rate hike next week very likely, said Lorenzo Codogno at the Bank of America. "Today's reading adds upside risk to our trend-like GDP growth forecast for the current year in Germany and the euro zone, and in particular to the first quarter 2006. Moreover, it strongly argues in favour of another 25 basis point increase in ECB rates in March, which is almost a done deal in our view," he said. Elsewhere, the yen remained firm across the board after Bank of Japan Governor Toshihiko Fukui earlier suggested the central bank is looking to end its ultra-loose monetary policy. The pound remained firm meanwhile, continuing to benefit from yesterday's Monetary Policy Committee minutes which pointed strongly to interest rates remaining on hold for the time being. The currency shrugged off some very poor fourth quarter business investment numbers earlier this morning, given that they are often subject to substantial revisions. Provisional figures released by National Statistics showed business investment fell by 1.0 pct from the third quarter for an annual rise of just 0.3 pct. The weak numbers are likely to concern UK rate-setters who forecast in last week's quarterly Inflation Report a "rather modest acceleration" in business investment in the coming months. They also raise doubts that the UK economy will be able to rebalance towards the corporate sector. "Overall, today's figures put both the Treasury's and Bank of England's expectations of a re-balancing towards the corporate sector in doubt," said Vicky Redwood at Capital Economics