Euro hits 20-month high against dollar

The euro hit a new 20-month high against the dollar today amid concerns about the US economy and the possibility of an interest…

The euro hit a new 20-month high against the dollar today amid concerns about the US economy and the possibility of an interest rate cut.

The euro was up 0.8 per cent at $1.3251, just below its session high of $1.3261.

The specter of stagnating or falling rates in the US compared with rising rates in Britain and the eurozone has hurt the dollar in the past week.

The ECB is expected to raise rates to 3.5 per cent in December, closing the gap on the 5.25 per cent targeted by the US Federal Reserve since late June.

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French Finance Minister Thierry Breton today repeated the need for vigilance on the euro's recent rapid rise against the dollar but that failed to slow the euro's advance.

But yesterday European Economic and Monetary Affairs Commissioner Joaquin Almunia disagreed with Mr Breton, saying the euro's level gave no reason for concern.

Underscoring the lack of agreement, Mr Almunia told France's Le Monde newspaper there was no reason to worry about the euro's level. "There is no reason to be alarmed by the situation or alarmist," he said.