The dollar rose against the euro Tuesday after a credit ratings agency cut Portugal's debt rating, focusing attention on Europe's lingering debt crisis. In morning trading in New York, the euro dropped to $1.4195 from $1.4216 late Monday, giving back some of its recent gains. The euro has been climbing most of the year, gaining nearly 3 percent since early March and hitting a five-month high on Monday. Investors expect the European Central Bank to raise the key interest rate for the 17 countries that use the euro to 1.25 percent from 1 percent, where it has stood since May 2009, because of the threat of inflation from climbing energy and food prices. The ECB meets on Thursday. Higher rates tend to increase demand for a currency. The expectation of a move from the ECB has helped the euro climb. But the latest development refocused investors' attention on Europe's debt crisis. Moody's, a leading credit ratings agency, said that Portugal would likely be the third European country to need a bailout as it downgraded the country's debt rating. Greece and Ireland have already received emergency aid. Meanwhile, the Federal Reserve has kept the benchmark U.S. rate near zero since December 2008. The Fed is releasing minutes of its March 15 meeting Tuesday afternoon. The report could shed more light on how the group of policymakers views the economy and rising oil and food prices. A speech by Fed Chairman Ben Bernanke on Monday night helped boost the dollar against the euro and yen in overnight trading, as the chairman said the central bank was watching inflation closely and would "have to respond" to a broad move up in prices.

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