The European Central Bank (ECB) was meeting in Frankfurt on Wednesday to discuss its key interest rates, which were widely expected to rise to 4.0 percent on Wednesday, the highest in nearly six years.

The ECB's rate-setting governing council held a meeting at 08:00 local time (0700 GMT) and is supposed to make an announcement at 12:45 (1145 GMT). Jean-Claude Trichet, president of ECB, will explain the reasoning behind the move at a news conference 45 minutes later.

The ECB expected to raise its benchmark "refi" refinancing rate by a quarter of a percentage point to 4.00 percent, which would double the rates in euro zone in one and half years.

As the economies in the zone are increasingly improving, the bank has strongly signaled in recent weeks to raise rates to head off inflation.

Financial investors are expecting the rates to be raised to 4.25 percent this year.

The euro rose for a third straight day against the U.S. dollar to trade around 1.3525 dollars in anticipation of a rate increase by the ECB.

Source: Xinhua