The euro today hit record highs against the yen and its best since January 1999 against the dollar.
The euro rise came as investors continued to flock to high yields after the European Central Bank's (ECB) decision to keep interest rates on hold.
The latest surge in the euro, which has climbed 10 per cent against the dollar in six weeks, was also fuelled by ECB chief Mr Wim Duisenberg's comment after yesterday's decision that it would take longer than expected for inflation to fall below 2 per cent.
The euro rose as high as $1.1535, only two cents below its launch level against the dollar, before correcting to around $1.15. It also hit record highs against sterling for a second straight day, approaching 72 pence.
Global investors have been pouring funds into high-yielding currencies in the past few weeks, and the benchmark euro zone rate of 2.50 per cent is double the Federal Reserve's federal funds rate.
The ECB's no-change decision came after the US Fed earlier this week hinted at its readiness to cut rates, already at four-decade lows, citing the risk of an unwanted fall in inflation.
US Treasury Secretary Mr John Snow last night said a "wobbly" US recovery was being restrained by weak economic performance in Europe and Japan.