The euro hit an eight-month high against the US currency today, reaching above $1.44 as investors grew bolder on fresh signs of an economic recovery.
A key US industrial indicator and manufacturing data from the euro zone added to confidence after US growth data on Friday showed a narrower than expected 1%decline in output in the second quarter.
In late trade the euro was changing hands at $1.4406, up from $1.4255 reached on Friday. It earlier reached $1.4436, its highest point since December 18, driven up by a survey that showed the US factory sector moved within striking distance of growth in July.
The Institute of Supply Management said its index of the manufacturing sector rose to 48.9% from 44.8% in June, better than expected.
The euro is seen as a higher-risk investment than the dollar and tends to strengthen in times of increasing confidence.
European stock markets rose strongly today, boosted by earnings news from the British banks HSBC and Barclays, which also strengthened the pound and investors were looking ahead to further financial results.
Meanwhile, the price of sugar reached a record high in London today, aided by a weaker dollar amid more positive signs of economic recovery and the commodity's weak supply situation.
In London trade, white sugar for delivery in October reached £505.9 sterling a tonne - the highest level since the commodity was first traded in this form in 1983.
In New York, unrefined sugar for October hit a three-year high of 19.43 US cents a pound.
