NEW YORK/LONDON—The euro rose sharply against the U.S. dollar on Thursday as foreign currency traders sorted through moves in the interest rate markets and comments by the European Central Bank President Christine Lagarde. The euro rose nearly 0.7 percent to at $1.168 at 1425 GMT. The dollar index of major currencies fell 0.6 percent to 93.3560. The volatility came in a busy day of central bank-driven activity that started in Australia and Japan and precedes a meeting of the U.S. Federal Reserve next week. “The market is very much triggered and sensitive to inflation worries and this notion that central banks are behind the curve,” said Mazen Issa, senior currency strategist at TD Securities. Exchange rate movements picked up on Wednesday when the Bank of Canada made hawkish comments. The markets had been on pause early at the start of the week. A contributing factor to the volatility, Issa said, …