The dollar fell to a new low against the euro on Tuesday, crossing the $1.60 per euro mark, after European Central Bank officials signaled that growing inflation may force the bank to boost interest rates.

ECB council member Christian Noyer, the head of the French central bank, told RTL radio on today that if needed the ECB will move rates to bring inflation below 2 percent next year. The current inflation rate is 3.6 percent.

Also, Luxembourg central banker Yves Mersch said whether the ECB should raise rates is a valid question, according to the Financial Times Deutschland.

The ECB has maintained it 4 percent benchmark lending rate steady since June despite heavy cuts by the U.S. Federal Reserve to ward off a recession.

The dollar fell as low as $1.6018 per euro. The U.S. currency was trading at 1.5996 per euro at 3:09 p.m. from $1.5912 late Monday in New York. The euro traded at 164.64 yen from 164.71. The dollar dropped to 102.97 yen from 103.27.

European union Inflation