The euro has continued its rally on currency markets, speeding past the 1.36 mark against the US dollar. It thus reached its highest level in over a year as business confidence returns within the euro area.
The euro continued to edge higher on the US dollar in early trading on Friday, backing indications that the currency of the 17-member eurozone was seen as much more stable by investors than a couple of years ago.
The euro climbed to over 1.36 against the dollar, marking its highest level since November 2011. It gained more than 16 cents on the dollar since its low in July near 1.20.
Since the beginning of the current year, the euro already gained four cents amid increasing signs that the worst of the debt crisis might finally be over. "Money is flowing back to Europe," RBS analyst Jesper Bargmann said in a statement.
Fundamental data matter
The dollar has been under more pressure as data showed the US economy contracted in the final quarter of 2012, while a surge in eurozone business and consumer confidence helped the euro continue its rally.
Economists on Friday were expecting crucial data from the US, including non-farm payroll figures, construction spending and vehicle sales, with traders looking for fresh clues as to the current state of the US economy.
Commerzbank economist Lutz Karpowitz maintained the rise of the euro against the dollar could continue for a while even if US data turned out to be extremely positive. But he warned that the rally was bound to backfire, should it continue to be based primarily on confidence indices rather than on hard economic figures.
hg/msh (Reuters, AFP, dpa)