The euro rose sharply after a key survey on German business confidence came in well above expectations, cementing expectations that interest rates in the euro zone will continue to rise The Ifo business climate index jumped to 105.4 in March from 103.4 in February, the highest reading since April 1991 and well above forecasts for a drop to around 102.9. The strong figure is particularly surprising given recent weak business confidence surveys elsewhere in the euro zone The outlook for the future remained very optimistic too, with the Ifo business expectations index also surging to 105.7 from 104.9 in February. "These numbers will be a fillip for the European Central Bank, who will be looking at the stronger recovery tone in Germany as leverage to justify higher rates ahead," said David Brown at Bear Stearns. "With euro zone inflation expected to head below target in the next few months, it should intensify pressure on the ECB to tighten rates sooner rather than later," he said. Meanwhile, attention later today is set to centre on this evening's interest rate decision in the US. With a quarter point rise in the Fed Funds rate to 4.75 pct already fully priced in, all eyes will be on the Federal Reserve Open Market Committee's accompanying statement for clues on whether further hikes can be expected. Most expect the Fed to reiterate its previous assessment that further tightening "may be required", paving the way for another hike in May. A significant number, however, believe there is a risk that recent data showing a slowdown in the US housing market could prompt the FOMC to end its tightening cycle here