Euro hits record high against dollar in late surge

THE euro rose to a record high against the dollar yesterday despite positive news on the US economy.

The American currency slipped a further 0.8% against the euro, which touched a new high of $1.2077 yesterday afternoon.

New figures on the services sector of the US economy showed it growing faster than expected, which could prompt a swift rise in US interest rates.

The dollar, which has been under sustained pressure from the single currency this year, lost half a cent against the euro even though data on this side of the Atlantic showed French consumer confidence falling back in November.

There was also a warning from the Austrian minister for finance that the surge in the euro this year could hit the economic rebound the euro zone area.

The euro, which hit $1.2042 on Monday night, fell back to €1.19 against the dollar in early trading yesterday before a late surge. The currency has gained 12% so far this year, on top of the 18% surge in 2002, bringing the euro to record level against the dollar.

According to economists, the dollar is set to claw back some more ground against the euro later in the week with new statistics on the US economy showing further signs of improvement.

Labour market figures released on Friday are expected to show the US economy added 150,000 jobs in November.

“The dollar has finally managed to gain some ground on the back of strong data,” said Steve Pearson, chief currency analyst at HBOS Treasury Services. However, there was also strong economic data from unemployment in the euro zone which remained unchanged in October from September, according to the EU statistics office Eurostat.

The average jobless rate in the 12 nations that share the euro stood at 8.8% in October, unchanged from September but up from 8.5% a year earlier.

In the EU 15, unemployment was unchanged on the month at 8%, but up from 7.8% in October 2002.