NEW YORK (Reuters) — The euro slipped against the dollar yesterday after the European Central Bank gave no clear signs that it would continue raising interest rates beyond 2007.The ECB lifted euro-zone rates to four percent, but the hike had been well telegraphed and failed to boost the euro, which has been trending higher along with European interest rates over the last year.

While ECB President Jean-Claude Trichet said liquidity remains ample and inflation risks remain tilted to the upside, he added the ECB does not intend to alter its 2008 inflation forecast.

By holding that forecast steady at a midpoint of two percent, "the ECB has chosen not to send a hawkish signal", said Divyang Shah, strategist at Commonwealth Bank of Australia in London.

Euribor contracts rallied across the 2008 part of the curve after Trichet's remarks, with the chances of euro-zone rates hitting 4.5 percent by March falling to around 60 percent, from 80 percent a day ago.

"We are getting toward the point where (interest rates) are neutral, so there's no additional impetus there for the euro to gain on the back on that," said Shaun Osborne, senior currency strategist at TD Securities in Toronto.

The euro slipped below $1.3500 to a session low of $1.3486 , down 0.2 percent from late Tuesday and nearly two cents from a record high above $1.3680 hit in April.

"It seems the ECB is going to hold off for a while, and the euro will have a tough time getting through $1.36 again soon," said David Hilgeman, an analyst at optionsXpress in Chicago.

At four percent, euro-zone interest rates are at their highest level in nearly six years and are double what they were 18 months ago, when the ECB began its current tightening cycle.

The euro fell 0.5 percent against the yen to 163.45 , just above a session trough, and hit a one-month low at 1.6423 francs.

The yen also gained ground on the dollar, which fell 0.3 percent to 121.05 yen as major US stock indices fell in the wake of soft global equity markets.