The euro has risen to its highest level against the dollar in nearly three years as jitters over North Korea's nuclear programme helped push the dollar down.
The currency reached $1.0364 on European markets before slipping back to $1.0341 by the afternoon. Trading volume was light.
The peak was the highest since January 12, 2000, when the euro hit $1.0370.
The rise is the latest stage in a rally that has seen the euro rise 17 per cent from about 86 US cents in February.
Mr Kevin Harris, economist at market advisory firm MCM in New York, said fears about worsening relations with North Korea had weighed on the dollar, with the impact on the exchange rate exaggerated by very light trading due to the holiday.
Most economists say the rally is more a story of the dollar's weakness than of any new confidence in the economies of the 12 countries that use the euro.
Growth in the euro countries has been sluggish, with only a 0.3 per cent increase in gross domestic product during the third quarter.
Investors have pulled out of dollar assets as US stock markets have performed weakly during the year, and as fears have grown about the strength of markets' recent rebound.
Some of that money has fled to short-term cash holdings in Europe, where interest rates are higher.
Moving from dollar-denominated stocks and bonds to assets in other currencies means selling dollars - and thus driving down the dollar's exchange rate.
PA