The euro has continued to gain momentum as worries about the Japanese and US stock markets continue to dominate the markets.
The currency has rallied to six-week highs against the yen and three-week highs against the dollar.
Investors are worried that the Japanese economy is heading back into recession, having hardly climbed out of it over the past year or so.
According to Mr Steven Englander, global currency strategist at Citibank in London, the foreign exchange market has priced in too much pessimism on eurozone prospects. "Even a partial unwinding of this excess pessimism will boost the euro in coming months." Japan's benchmark Nikkei average has sunk to 15-year lows for the third day in a row, undermined by weak economic data and political uncertainty.
"The euro is looking like a safe haven, as both the US and Japan are underperforming," said Mr Englander. "Markets are beginning to worry whether this is more than a normal cyclical downturn."
The euro closed at $0.9331 from $0.9286 a day earlier. The currency also held its own as economic sentiment dipped by more than expected in February, with the reading falling to 102.7 from a revised 103.1 in January. This followed data showing the French consumer confidence index fell to five in February from January's record of seven.
--(Additional reporting from Reuters)
