The euro hit an 11-week high against a broadly weak dollar today as month-end demand for the single currency helped push it beyond a key barrier.
Market participants said some Asian central banks were buying the euro, helping to push the dollar to a three-month low versus a currency basket.
Earlier, the euro had climbed 0.7 per cent on the day to $1.3073 according to electronic trading platform EBS, its highest since May 10th.
"There are a lot of orders in the $1.3050 area which had been targeted. When those were triggered it made for a higher euro/dollar," said Lutz Karpowitz, strategist at Commerzbank in Frankfurt.
"It's a matter of technical factors that is driving the market today." Data showing a slide in Germany's unemployment rate to 7.6 per cent in July, adding to other recent upbeat data on Europe's biggest economy, also helped to support the single currency.
Other analysts added that investors who had been wary of buying the euro before last week's bank stress test results had resumed picking up the single currency before the month ends, while position adjustments would also work in the euro's favour.
"A lot of people are still covering short positions in the euro, and that will continue," said John Hydeskov, senior currency analyst at Danske in Copenhagen.
Analysts said ongoing optimism about second-quarter US corporate earnings would add to the view of an improving global economy, which would support shares and keep euro demand intact. European stocks rose 0.5 per cent in early trade.
Analysts said euro support was growing around $1.30, as the single currency has managed to end New York trade and begin the Asian session around that level every day so far this week.
Against the yen, the euro rose 0.3 percent to 113.92 yen, recovering from early losses and edging towards 114.74 yen struck on trading platform EBS yesterday.
The euro had slipped in Asian trade due to month-end selling by Japanese exporters, Tokyo-based traders said, adding that more offers were likely to emerge if the euro rebounds and rises towards 115 yen.
Reuters