LONDON (AFP) - The euro hit a record high 1.5984 dollars Thursday as the European Central Bank warned that surging eurozone inflation could last longer than thought, reducing chances of a cut to interest rates. Following the new high, the euro eased back to 1.5956 dollars but was still up from 1.5950 late Wednesday in New York. The dollar rose to 101.92 yen from 101.81 on Wednesday. "The notion of an ECB being on hold (over rates) for longer after the latest rise in inflation ... is pushing the euro back towards 1.60 dollars," Commerzbank economist Antje Praefcke said on Thursday. The euro has struck a series of record highs above 1.59 dollars since official data showed eurozone inflation reached an annual rate of 3.6 percent in March the highest since the launch of the single currency in 1999. Analysts said Wednesday's inflation data was likely to mean the European Central Bank would hold borrowing costs for the foreseeable future. The ECB's benchmark rate, 4.00pc, is already substantially higher than that of the US Federal Reserve, which stands at 2.25pc. The higher interest rate offered in the eurozone and the likelihood that it will not change makes the euro a more attractive investment than the dollar, analysts said. "The euro area is experiencing a rather protracted period of temporarily high annual rates of inflation, resulting mainly from increases in energy and food prices," the ECB said in its latest monthly bulletin published Thursday. In addition, "the level of uncertainty resulting from the turmoil in financial markets remains unusually high and tensions may last longer than initially expected," it commented. But the ECB bulletin also noted that bank lending to businesses and individuals did not appear to have been seriously affected by the financial turbulence sparked in the wake of the US subprime housing market collapse. The dollar has fallen sharply, particularly against the euro, in recent months as US economic growth has also slowed. "The euro is the strongest currency now," said Saburo Matsumoto, chief foreign exchange strategist at Sumitomo Trust Bank. Two economic reports released Wednesday have added to the dollar's woes. The Labor Department published a monthly snapshot showing that consumer prices rose a modest 0.3 percent in March amid a spike in energy prices. A separate report from the Commerce Department revealed that the US housing market remains stuck in the doldrums. New home construction and applications for permits to build new residential properties tumbled to a 16-year low in March of 947,000 units at an annualized rate, the survey said. In European trading Thursday, the euro changed hands at 1.5956 dollars against 1.5950 late Wednesday, at 162.55 yen (162.38), 0.8073 pounds (0.8084) and 1.5930 Swiss francs (1.5948). The dollar stood at 101.92 yen (101.81) and 0.9987 Swiss francs (0.9997). The pound was at 1.9761 dollars (1.9727). On the London Bullion Market, the price of gold rose to 950.35 dollars per ounce from $945 late on Wednesday.