The euro raced past $1.36 for the first time since December 2004 in Europe this morning, reaching as high as $1.3616. It later fell back to €1.3591 late this afternoon.
Currency dealers say speculators are rushing to buy the euro in anticipation of rising interest rates and an improved economic performance in the euro zone.
The euro zone, and particularly the German economy, is showing unexpectedly strong growth, despite the strength of the euro which can increase the price of exports on foreign markets.
Meanwhile, sterling went above $2.01 to reach the highest point since June 1981. On Tuesday, unexpectedly strong British inflation data increased expectations that British interest rates will soon be increased to contain price rises.
