The euro hit another record high against the dollar this morning after a senior Chinese political figure said China should balance its foreign exchange reserves so that strong currencies such as the euro offset weakening currencies such as the dollar.
The euro rocketed higher after Cheng Siwei, vice-chairman of the standing committee of the National People's Congress, China's parliament, commented on diversification of China's $1.43 trillion stockpile of foreign exchange reserves.
"The comments gave the euro a push in the back," said Kimihiko Tomita, head of foreign exchange for State Street Global Markets in Tokyo, adding that the euro's climb likely gained steam due to stop-loss buying.
Cheng later said his comments should not be construed as suggesting that Beijing buy more euros.
Today the currency hit a record high above $1.47.
European Central Bank policymakers have been relaxed about the euro's steep rise against the dollar - in public at least - but its move towards $1.50 is raising the prospect that it might intervene.
European politicians have become increasingly vocal about the euro, which is up 11 per cent this year and 78 per cent from its 2000 low, fearing its strength will squeeze exporters out of global markets.
The last time the ECB entered the foreign exchange market was in 2000 when it acted with the US Federal Reserve and the Bank of Japan to prop up the euro when it hit a record low at $0.8225.
The dollar index, which measures the dollar's value against a basket of major currencies today also touched a record low of 75.490.
The dollar also fell 0.6 per cent to 113.90 yen Sterling rose to a fresh 26-year high above $2.0950
The currencies of natural resource-rich countries such as Australia and Canada were the biggest gainers from a rally in commodities that pushed gold to a 28-year high and US crude oil futures to a record high today.