The euro eased back today but was still on track to be the world's best-performing major currency this year.

Meanwhile, the dollar was set for its biggest annual gain against the yen since 1979.

The euro has gained more than 4% against the dollar this year.

The gain has baffled many hedge funds who had expected a weak euro zone economy and a reduction in Federal Reserve bond-buying to strengthen the greenback this year. 

The Fed, however, finally announced its first move earlier this month and a steady reduction in the flood of dollars it is pumping into the economy looks set to contrast starkly with the Bank of Japan next year.
The euro has also gained 26% against the yen this year.

It was trading at $1.3784 and 83.30 pence sterling today.