June 9 (Bloomberg) -- The euro traded 0.6 percent from a one-month high versus the dollar on speculation European Central Bank President Jean-Claude Trichet will today signal policy makers are likely to raise interest rates next month. The dollar was 0.2 percent from the weakest level in a month against the yen ahead of a U.S. report that economists said will show the trade deficit widened to the most in 10 months, adding to signs the economy is losing momentum. New Zealand's dollar strengthened toward a record after the country's central bank said borrowing costs will need to rise in the next two years. "The markets are expecting Trichet to signal a hike in July," said Khoon Goh, head of market economics and strategy at ANZ National Bank Ltd. in Wellington. "If he does that, the yield story will continue to provide support for the euro." The euro traded at $1.4604 at 9:47 a.m. in Tokyo from $1.4583 in New York yesterday. It reached $1.4697 on June 7, the strongest since May 5. The currency was at 116.90 yen from 116.51 yen. The dollar bought 80.04 yen from 79.89 yen yesterday, when it touched 79.70, the lowest level in a month. The pound was at $1.6402 from $1.6403 yesterday. The U.K. currency fetched 89.06 pence per euro from 88.90 yesterday, when it reached 89.76, the weakest since May 5. The Bank of England will keep its benchmark interest rate unchanged at 0.5 percent at today's meeting, according to all 55 economists surveyed by Bloomberg News. Gradual Increases Demand for the euro was supported as traders increased bets that the ECB will raise interest rates. ECB Governing Council member Mario Draghi, the nominee to take over from Trichet when his term ends, said yesterday he will pursue a policy of "gradualism" in lifting interest rates and scaling back emergency liquidity measures as the euro-area economy grapples with a debt crisis. All 52 economists surveyed by Bloomberg News forecast the ECB will leave its main interest rate at 1.25 percent when policy makers meet in Frankfurt today. The central bank raised borrowing costs in April for the first time in almost three years, bringing the main refinancing rate to 1.25 percent. The ECB will lift its benchmark rate by 79 basis points over the next year, according to a Credit Suisse Group AG index based on swaps trading yesterday. The prediction was for 73 basis points a week earlier. U.S. Trade Deficit The dollar has declined 4.3 percent against nine other currencies of developed economies in the last three months, according to Bloomberg Correlation-Weighted Indexes. "The fact that the market seems to be focusing more on worsening cyclical prospects for the U.S., that means we are due for some further dollar weakening," said Todd Elmer, head of Group of 10 currency strategy for Asia ex-Japan at Citigroup Inc. in Singapore. The U.S. trade gap expanded to $48.8 billion in April from the $48.2 billion shortfall in March, according to the median of 75 estimates in a Bloomberg survey ahead of the Commerce Department's report today. The forecast April deficit would be the largest since June 2010. Federal Reserve Chairman Ben S. Bernanke said on June 7 that the central bank should maintain monetary stimulus to bolster a "frustratingly slow" recovery. The Fed has kept its target rate for overnight loans between banks in a range of zero to 0.25 percent since December 2008. RBNZ New Zealand's dollar gained against all 16 of its most- traded counterparts after Reserve Bank of New Zealand Governor Alan Bollard signaled the central bank will lift interest rates. "The central bank's statement was hawkish and effectively allows for a December hike," said Imre Speizer, a market strategist in Auckland at Westpac Banking Corp., Australia's second-biggest lender. "It's bullish for the kiwi dollar." The New Zealand currency rose to 82.33 U.S. cents from 81.50 cents yesterday. It reached a record 82.64 U.S. cents on May 31. The kiwi advanced 1.2 percent to 65.90 yen. Against its Australian counterpart, the smaller nation's dollar climbed for a third day to NZ$1.2938 and touched NZ$1.2917, the most since Feb. 2. Today's decision to keep the benchmark rate unchanged at 2.5 percent by the RBNZ was predicted by all 15 economists surveyed by Bloomberg News. Swaps traders are betting the central bank will increase the key rate by 65 basis points over 12 months, up from 56 basis points yesterday, a Credit Suisse Group AG index showed today. "A gradual increase in the official cash rate over the next two years will be required," RBNZ Governor Alan Bollard said in a statement accompanying the decision. "The pace and timing of increases will be guided by the speed of recovery."

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