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Bob Moon: There was a real dilemma shaping up today for our friends in Europe, where new figures show consumer prices are rising fast to an all-time high of 4 percent. That inflation jump all but cinches an interest rate hike there this week.

But here's the catch: If you raise rates, you make investing in the euro more attractive and the U.S. greenback is almost certain to suffer.

What's more, an influential study out today is warning of a serious slowdown for the global economy, suggesting that it's not a good idea to kick the dollar when it's down.

From London, Marketplace's Stephen Beard reports:.

Stephen Beard: The Bank for International Settlements, or BIS, represents the world's top 55 central banks. In its annual report out today, it paints a grim picture of the global economy: Governments and individuals are weighed down with debt, says the bank. It may not take too much to tip them into default. A very severe downturn could follow.

Ambrose Evans Pritchard is a financial correspondent with the Daily Telegraph. He says the BIS is worried that some central banks may miscalculate.

Ambrose Evans Pritchard: Their fear is that if the central banks raise interest rates in order to deal with an inflationary spike caused by oil and food, they could tip the whole thing right over and make it much, much worse. You could get yourself into a situation that would be a bit like the 1930s.

This week, the European Central Bank, or ECB, meets to set euro interest rates. Inflation is the major concern. Today, it's an all-time high for the Eurozone of 4 percent. The ECB will now very likely raise rates to slow growth in spite of the BIS report.

Economist Andrew Hilton:

Andrew Hilton: It sees these inflationary pressures on the whole as more damaging in the short term than the threat of a major economic downturn.

And he says unlike the Federal Reserve, the ECB has only one duty: to bear down on inflation.

Hilton: That is the mandate of the European Central Bank. It doesn't have a mandate to maintain growth. It does have a mandate to hold down inflation.

Officials at the BIS are said to be resigned to the likelihood that the ECB will raise rates, but they're waiting and hoping for a sign from Frankfurt that it's one and done.

In London, this is Stephen Beard for Marketplace.